qualified subprime loan
(12) Special rules for subprime refinancings (A) In general Notwithstanding the requirements of subsection (i)(1), the proceeds of a qualified mortgage issue may be used to refinance a mortgage on a residence which was originally financed by the mortgagor through a qualified subprime loan. (B) Special rules In applying subparagraph (A) to any refinancing— (i) subsection (a)(2)(D)(i) shall be applied by substituting “12-month period” for “42-month period” each place it appears, (ii) subsection (d) (relating to 3-year requirement) shall not apply, and (iii) subsection (e) (relating to purchase price requirement) shall be applied by using the market value of the residence at the time of refinancing in lieu of the acquisition cost. (C) Qualified subprime loan The term “qualified subprime loan” means an adjustable rate single-family residential mortgage loan made after December 31, 2001 , and before January 1, 2008 , that the bond issuer determines would be reasonably likely to cause financial hardship to the borrower if not refinanced. (D) Termination This paragraph shall not apply to any bonds issued after December 31, 2010 .