Special mortgage subsidy bond rules for residences located in disaster areas

Paragraph (11) of section 143(k) of the Internal Revenue Code of 1986 is amended to read as follows:

(11)

Special rules for residences located in disaster areas

(A)

Home improvement loans for repairs

In the case of financing provided by a qualified home improvement loan for the repair of damage to a residence located in a disaster area which was sustained as a result of the disaster— (i)the limitation under paragraph (4) shall be increased (but not above $150,000) to the extent such loan is for the repair of such damage, and (ii)subsection (f) (relating to income requirement) shall be applied as if such residence were a targeted area residence. (B)

Purchase of replacement home

In the case of financing provided to acquire a residence located in a disaster area by mortgagors whose prior residence was in such area and was destroyed or otherwise rendered uninhabitable as a result of the disaster— (i)subsection (d) (relating to 3-year requirement) shall not apply, and (ii)subsections (e) and (f) (relating to purchase price requirement and income requirement) shall be applied as if such residence were a targeted area residence. (C)

Financing must be provided within 2 years after disaster declaration

This paragraph shall apply only to financing provided within 2 years after the date of the disaster declaration. (D)

Disaster area

For purposes of this paragraph, the term disaster area means an area determined by the President to warrant assistance from the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. (E)

Application of paragraph

This paragraph shall apply only with respect to bonds issued after September 8, 2005.