### Question
What is the definition of qualified mortgage issue?


### Answer
The definition of **qualified mortgage issue** is as follows in *26 U.S.C. § 143*:

> an issue by a State or political subdivision thereof of 1 or more bonds, but only if—


(i) all proceeds of such issue (exclusive of issuance costs and a reasonably required reserve) are to be used to finance owner-occupied residences,


(ii) such issue meets the requirements of subsections (c), (d), (e), (f), (g), (h), (i), and (m)(7),


(iii) such issue does not meet the private business tests of paragraphs (1) and (2) of section 141(b), and


(iv) except as provided in subparagraph (D)(ii), repayments of principal on financing provided by the issue are used not later than the close of the 1st semiannual period beginning after the date the prepayment (or complete repayment) is received to redeem bonds which are part of such issue

#### Citation:
  - *26 U.S.C. § 143*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IV-TAX EXEMPTION REQUIRE- > Subpart A-Private Activity Bonds**

