SECTION 3. APPLICATION

Average Area Purchase Price Safe Harbors

.01 Average area purchase price safe harbors for statistical areas in each state,

the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, the Virgin Islands, and Guam are set forth in section 4.01 of this revenue procedure. Average area purchase price safe harbors are provided for single-fam­ ily and two to four-family residences. For each type of residence, section 4.01 of this revenue procedure contains a sin­ gle safe harbor that may be used for both new and existing residences. Issuers of qualified mortgage bonds and issuers of mortgage credit certificates may rely on these safe harbors to satisfy the require­ ments of §§ 143(e) and (f). Section 4.01 of this revenue procedure provides safe harbors for MSAs and for certain coun­ ties and county equivalents. If no pur­ chase price safe harbor is available for a statistical area, the safe harbor for “ALL OTHER AREAS” may be used for that statistical area.

.02 If a residence is in an MSA, the safe harbor applicable to it is the limita­ tion of that MSA. If an MSA falls in more than one state, the MSA is listed in sec­ tion 4.01 of this revenue procedure under each state.

.03 If the FHA revises the FHA loan limit for any statistical area after Decem­ ber 2, 2020, an issuer of qualified mort­ gage bonds or mortgage credit certificates may use the revised FHA loan limit for that statistical area to compute (as provid­ ed in the next sentence) a revised average area purchase price safe harbor for the sta­ tistical area provided that the issuer main­ tains records evidencing the revised FHA loan limit. The revised average area pur­ chase price safe harbor for that statistical area is computed by dividing the revised FHA loan limit by 1.03.

.04 If, pursuant to § 6a.103A-2(f) (5)(i), an issuer uses more accurate and comprehensive data to determine the av­ erage area purchase price for a statistical area, the issuer must make separate av­ erage area purchase price determinations for new and existing residences. More­ over, when computing the average area purchase price for a statistical area that is an MSA, as defined in OMB Bulletin No. 03-04, the issuer must make the com­ putation for the entire applicable MSA. When computing the average area pur­ chase price for a statistical area that is not an MSA, the issuer must make the com­

April 12, 2021 992 Bulletin No. 2021–15

putation for the entire statistical area and may not combine statistical areas. Thus, for example, the issuer may not combine two or more counties.

.05 If an issuer receives a ruling per­ mitting it to rely on an average area pur­ chase price limitation that is higher than the applicable safe harbor in this revenue procedure, the issuer may rely on that higher limitation for the purpose of satis­ fying the requirements of §§ 143(e) and (f) for bonds sold, and mortgage cred­ it certificates issued, not more than 30 months following the termination date of the 12-month period used by the issuer to compute the limitation.

Nationwide Average Purchase Price

. 06 Section 4.02 of this revenue pro­ cedure sets forth a single nationwide average purchase price for purposes of

computing the housing cost/income ratio under § 143(f)(5).

.07 Issuers must use the nationwide average purchase price set forth in section 4.02 of this revenue procedure when com­ puting the housing cost/income ratio un­ der § 143(f)(5) regardless of whether they are relying on the average area purchase price safe harbors contained in this reve­ nue procedure or using more accurate and comprehensive data to determine average area purchase prices for new and existing residences for a statistical area that are dif­ ferent from the published safe harbors in this revenue procedure.

.08 If, pursuant to section 6.02 of this revenue procedure, an issuer relies on the average area purchase price safe harbors contained in Rev. Proc. 2020-18, the issuer must use the nationwide average purchase price set forth in section 4.02 of Rev. Proc. 2020-18 in computing the housing cost/

income ratio under § 143(f)(5). Likewise, if, pursuant to section 6.04 of this revenue procedure, an issuer relies on the nation­ wide average purchase price published in Rev. Proc. 2020-18, the issuer must use the average area purchase price safe har­ bors set forth in section 4.01 of Rev. Proc. 2020-18 in computing the housing cost/ income ratio under § 143(f)(5).