PLR 200052013: Housing authority may use updated home price limits

Plain-English summary

A housing authority submitted 1999 home sales data to calculate average purchase price limits for several areas. The IRS found the data more accurate and comprehensive than the data used for published safe harbor limits and approved the authority's submitted limits for new and existing single-family homes. The letter lists the approved figures by redacted area. The authority could rely on them for up to 30 months after the end of the data period when issuing mortgage credit certificates and qualified mortgage bonds. The IRS expressed no broader opinion about the transaction under IRC § 143.

Ruling snapshot

• Question: May the housing authority use its own documented average home price limits?
• Outcome: Approved for the listed areas and limited reliance period.
• Key authorities: IRC §§ 25, 143; Temp. Treas. Reg. § 6a.103A-2(f)(5)(i).

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Number: 200052013
Washington, DC 20224
Release Date: 12/29/2000
Index Number: 143.07-01
Person to Contact:

Telephone Number:

Refer Reply To:
CC:TEGE:EOEG:TEB-PLR-114910-00
Date:
September 27, 2000

Legend

Authority =

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Dear :

This replies to your ruling request on behalf of the Authority concerning the use of average area purchase price limitations based upon more accurate and comprehensive data than that used to calculate the safe harbor limitations published in Rev. Proc. 94-55, 1994-2 C.B. 706. The Authority submitted data concerning sales of new single-family residences for certain metropolitan statistical areas and for all other areas for the 12-month period from January 1, 1999 to December 31, 1999. The Authority also submitted data concerning sales of existing single-family residences for certain metropolitan statistical areas and a county for the same period. The data

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PLR -114910-00

submitted conforms with the definitions for the nation’s metropolitan areas established in Office of Management and Budget Bulletin 99-04, dated June 30, 1999, and effective June 30, 1999.

Based on the information submitted and representations made, we conclude that the calculations submitted by the Authority, in the cases of new and existing single- family residences, are based upon more accurate and comprehensive data than that used for calculating the limitations published in Rev. Proc. 94-55, and may be used by the Authority as provided by § 6a.103A-2(f)(5)(i) of the Temporary Income Tax Regulations.

Accordingly, the following are the new safe harbor limitations for single-family residences justified by the documentation received:

New
Existing
Statistical Area Construction Housing
A 162,041 133,323
B 182,260 103,972
C 224,238 208,397
D --------- 145,000
E --------- 93,363
F 142,934 105,170
G --------- 102,580
H 148,786 ---------

The figures approved above may be relied upon for a period of not more than 30 months following the termination date of the 12-month period used by the Authority to compute the average area purchase price limitation for purposes of issuing mortgage credit certificates under § 25 and qualified mortgage bonds under § 143 of the Internal Revenue Code (“Code”).

Except as specifically ruled above, no opinion is expressed concerning the effect of this transaction under any section of the Code, including § 143.

This ruling is directed only to the taxpayer(s) requesting it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent.

In accordance with the Power of Attorney on file with this office, a copy of this letter is being sent to the taxpayer.

Sincerely yours,
Assistant Chief Counsel
(Tax Exempt Government Entities)
By: Timothy L. Jones
Assistant to the Chief, Branch 5 cc: