contract for deed
(1) Mortgages must be new mortgages (A) In general An issue meets the requirements of this subsection only if no part of the proceeds of such issue is used to acquire or replace existing mortgages. (B) Exceptions Under regulations prescribed by the Secretary, the replacement of— (i) construction period loans, (ii) bridge loans or similar temporary initial financing, and (iii) in the case of a qualified rehabilitation, an existing mortgage, shall not be treated as the acquisition or replacement of an existing mortgage for purposes of subparagraph (A). (C) Exception for certain contract for deed agreements (i) In general In the case of land possessed under a contract for deed by a mortgagor— (I) whose principal residence (within the meaning of section 121 ) is located on such land, and (II) whose family income (as defined in subsection (f)(2)) is not more than 50 percent of applicable median family income (as defined in subsection (f)(4)), the contract for deed shall not be treated as an existing mortgage for purposes of subparagraph (A). (ii) Contract for deed defined For purposes of this subparagraph, the term “contract for deed” means a seller-financed contract for the conveyance of land under which— (I) legal title does not pass to the purchaser until the consideration under the contract is fully paid to the seller, and (II) the seller’s remedy for nonpayment is forfeiture rather than judicial or nonjudicial foreclosure.