Hurricane Katrina: Low-Interest Home Loans

Under Katrina Emergency Tax Relief Act of 2005 Section 404(c), taxpayers whose homes were damaged or destroyed by Hurricane Katrina may be eligible to receive low-interest home loans to finance their repair or replacement. To qualify, their homes must be, or have been, located in a Federal Emergency Management Agency (FEMA)-designated individual assistance area; see Exhibit 1.

Note: If taxpayers plan to use their loans to repair Hurricane Katrina damage, the maximum they can borrow is $150,000.

If a home was not located in a FEMA-designated individual assistance area, taxpayers may still qualify for low-interest loans, provided they meet all of the following requirements:

• Their previous home was located in the Hurricane Katrina disaster area on Aug. 28, 2005.

• Hurricane Katrina rendered their previous homes uninhabitable.

• Their new homes are located in the same state as their previous homes.

Caveat: These loans will be available through the end of 2007. If taxpayers apply for one, they should ensure that their financing is completed before that date.

From Linda Gurene, San Antonio, TX