text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Hardship Outlays to protect 
  Mortgagee Equity (HOME) Act''.
  
  SEC. 2. WAIVER OF TAX ON EARLY DISTRIBUTIONS FROM CERTAIN RETIREMENT 
                PLANS FOR MORTGAGE PAYMENTS WITH RESPECT TO A PRINCIPAL 
                RESIDENCE.
  
      (a) In General.--Paragraph (2) of section 72(t) of the Internal 
  Revenue Code of 1986 is amended by adding at the end the following new 
  subparagraph:
                      ``(H) Distributions for principal residence 
                  mortgage payments.--Distributions to an individual 
                  which are qualified principal residence mortgage 
                  payment distributions (as defined in paragraph (9)). 
                  Distributions shall not be taken into account under the 
                  preceding sentence if such distributions are described 
                  in subparagraph (A), (C), (D), (E), or (F) or to the 
                  extent paragraph (1) does not apply to such 
                  distributions by reason of subparagraph (B).''.
      (b) Qualified Principal Residence Mortgage Payment Distributions.--
  Subsection (t) of section 72 of such Code is amended by redesignating 
  paragraphs (9) and (10) as paragraphs (10) and (11), respectively, and 
  by inserting after paragraph (8) the following new paragraph:
              ``(9) Qualified principal residence mortgage payment 
          distributions.--
                      ``(A) In general.--For purposes of paragraph 
                  (2)(H), the term `qualified principal residence 
                  mortgage payment distribution' means any payment or 
                  distribution received by an individual to the extent 
                  such payment or distribution is used by the individual 
                  before the close of the 120th day after the day on 
                  which such payment or distribution is received to pay 
                  qualified mortgage costs with respect to a principal 
                  residence (within the meaning of section 121) of such 
                  individual or the spouse of such individual.
                      ``(B) Aggregate lifetime dollar limitation.--The 
                  aggregate amount of payments or distributions received 
                  by an individual which may be treated as qualified 
                  principal residence mortgage payment distributions for 
                  any taxable year shall not exceed the excess (if any) 
                  of--
                              ``(i) $50,000, over
                              ``(ii) the aggregate amounts treated as 
                          qualified principal residence mortgage payment 
                          distributions with respect to such individual 
                          for all prior taxable years.
                      ``(C) Plan dollar limitation.--The aggregate amount 
                  of payments or distributions received by an individual 
                  which may be treated as qualified principal residence 
                  mortgage payment distributions with respect to any 
                  qualified retirement plan (as defined in section 
                  4974(c)) for any taxable year shall not exceed one-half 
                  the present value of the nonforfeitable accrued benefit 
                  of the individual under the plan (determined as of the 
                  beginning of such taxable year).
                      ``(D) Qualified mortgage costs.--For purposes of 
                  this paragraph, the term `qualified mortgage costs' 
                  means amounts paid as principal or interest on 
                  acquisition indebtedness, as defined in section 
                  163(h)(3)(B), except that--
                              ``(i) the dollar limitation of clause (ii) 
                          of such section shall not apply, and
                              ``(ii) any reference to a qualified 
                          residence shall be treated as a reference to 
                          the principal residence referred to in 
                          subparagraph (A).''.
      (c) Conforming Amendments.--
              (1) Section 401(k)(2)(B)(i) of such Code is amended by 
          striking ``or'' at the end of subclause (IV), by striking 
          ``and'' at the end of subclause (V) and inserting ``or'', and 
          by adding at the end the following new subclause:
                                      ``(VI) in the case of a qualified 
                                  principal residence mortgage payment 
                                  distribution (as defined in section 
                                  72(t)(9)), the date of such 
                                  distribution, and''.
              (2) Paragraphs (7)(A)(ii) and (11)(C) of section 403(b) of 
          such Code are each amended by striking ``section 72(t)(2)(G)'' 
          and inserting ``subparagraph (G) or (H) of section 72(t)''.
      (d) Effective Date.--The amendments made by this section shall 
  apply to distributions made in taxable years ending after the date of 
  the enactment of this Act.
target: Hardship Outlays to protect Mortgagee Equity (HOME) Act - Amends the Internal Revenue Code to allow taxpayers to withdraw amounts from their tax-exempt pension and retirement plans, without incurring the 10% penalty otherwise imposed on such withdrawals, to make mortgage payments on their principal residences.
feat_title: A bill to amend the Internal Revenue Code of 1986 to provide penalty free distributions from certain retirement plans for mortgage payments with respect to a principal residence and to modify the rules governing hardship distributions.