“To amend the Internal Revenue Code of 1986 to exclude from gross income certain proceeds of shared appreciation mortgage contracts.”
No CRS summary available for this bill.
This section establishes a new exclusion from gross income under IRC section 139J for (1) amounts received by a lender as repayment on a shared appreciation mortgage (SAM) that exceed the original principal obligation, if the borrower's income did not exceed 140% of the area median income for the property's census tract in the year the loan was issued and the property is the borrower's principal residence; and (2) gain from the disposition of a capital asset composed of or secured by such mortgages. A SAM is defined as a second-lien mortgage on a 1-to-4 family dwelling that (1) provides for lender sharing in a predetermined percentage of the property's net appreciated value not exceeding the mortgage amount divided by the purchase price, (2) requires no other payments, (3) does not exceed 49% of the purchase price, (4) is subordinate to a qualified mortgage (as defined in TILA section 129C(c)(2)), and (5) is not repayable before specified events (e.g., first lien maturity, property sale, or default). The exclusion applies to amounts received after December 31, 2025.