Tax Exempt Bonds for Housing Act

Tax Exempt Bonds for Housing Act - Amends the Internal Revenue Code to limit the eligibility of mortgage bond interest for exclusion from gross income to issues: (1) all the proceeds of which (excluding issuance costs, administrative expenses, and a reasonably required reserve) are reasonably expected to be used to finance owner-occupied residences; and (2) whose proceeds are used to acquire a residence whose cost does not exceed 300 percent of the median family income for the statistical area in which it is located (400 percent in the case of certain target areas). Limits eligible mortgagors for whom such owner-financing is provided to those whose family income is 120 percent or less of the median family income for the statistical area involved (150 percent in the case of certain target areas).

Limits the aggregate amount of qualified mortgage bonds issued during the calendar year to ten percent of the average annual aggregate principal amount of mortgages executed during the preceding three calendar years plus: (1) for State-issued bonds, an additional percentage determined according to a specified formula; or (2) in the case of local-issue bonds, an optional limit determined according to a specified formula.

Defines the kind of qualified census tract, chronic economic distress area, or blighted area which would constitute a target area for purposes of this Act.

Allows exclusion from gross income of interest on industrial development bonds which provide for projects for residential rental property if: (1) at least 20 percent of the units in each project are to be occupied by low or moderate income individuals; and (2) at least 55 percent of such units are to be occupied by individuals earning not more than 150 percent of low and moderate income individuals.