qualified residence with respect to which an al-
location is canceled by mutual consent of the 
homeownership credit agency and the allocation 
recipient. 
‘‘(D) UNUSED
HOMEOWNERSHIP
CREDIT 
CARRYOVERS
ALLOCATED
AMONG
CERTAIN 
STATES.—
‘‘(i) IN GENERAL.—The unused home-
ownership credit carryover of a State for 
any calendar year shall be assigned to the 
Secretary for allocation among qualified 
States for the succeeding calendar year. 
‘‘(ii) 
UNUSED
HOMEOWNERSHIP 
CREDIT CARRYOVER.—For purposes of this 
subparagraph, the unused homeownership 
credit carryover of a State for any calendar 
year is the excess (if any) of—
‘‘(I) the unused State home-
ownership credit ceiling for the year 
preceding such year, over 
‘‘(II) the aggregate homeowner-
ship credit dollar amount allocated for 
such year. 
‘‘(iii) FORMULA FOR ALLOCATION OF 
UNUSED
HOMEOWNERSHIP
CREDIT
CARRYOVERS
AMONG
QUALIFIED 
STATES.—The amount allocated under this 
subparagraph to a qualified State for any 
calendar year shall be the amount deter-
mined by the Secretary to bear the same 
ratio to the aggregate unused homeowner-
ship credit carryovers of all States for the 
preceding calendar year as such State’s 
population for the calendar year bears to 
the population of all qualified States for 
the calendar year. 
‘‘(iv) QUALIFIED
STATE.—For pur-
poses of this subparagraph, the term 
‘qualified State’ means, with respect to a 
calendar year, any State—
‘‘(I) which allocated its entire 
State homeownership credit ceiling for 
the preceding calendar year, and 
‘‘(II) for which a request is made 
(not later than May 1 of the calendar 
year) to receive an allocation under 
clause (iii). 
‘‘(E) STATE
MAY
PROVIDE
FOR
DIF-
FERENT
ALLOCATION.—Rules similar to the 
rules of section 146(e) (other than paragraph
(2)(B) thereof) shall apply for purposes of this 
paragraph. 
‘‘(F) POPULATION.—For purposes of this 
paragraph, population shall be determined in 
accordance with section 146(j). 
‘‘(G) COST-OF-LIVING ADJUSTMENT.—
‘‘(i) IN GENERAL.—In the case of a 
calendar year after 2005, the $2,000,000 
and $1.80 amounts in subparagraph (C) 
shall each be increased by an amount equal 
to—
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for such calendar year by substituting 
‘calendar year 2004’ for ‘calendar 
year 1992’ in subparagraph (B) there-
of. 
‘‘(ii) ROUNDING.—
‘‘(I) 
In 
the 
case 
of 
the 
$2,000,000 
amount, 
any 
increase 
under clause (i) which is not a mul-
tiple of $5,000 shall be rounded to the 
next lowest multiple of $5,000.
‘‘(II) In the case of the $1.80 
amount, any increase under clause (i) 
which is not a multiple of 5 cents 
shall be rounded to the next lowest 
multiple of 5 cents. 
‘‘(3) PORTION
OF
STATE
CEILING
SET-ASIDE 
FOR
CERTAIN
PROJECTS
INVOLVING
QUALIFIED 
NONPROFIT ORGANIZATIONS.—
‘‘(A) IN
GENERAL.—Not more than 90 
percent of the State homeownership credit ceil-
ing for any State for any calendar year shall be 
allocated to projects other than qualified non-
profit housing projects described in subpara-
graph (B). 
‘‘(B) PROJECTS
INVOLVING
QUALIFIED 
NONPROFIT ORGANIZATIONS.—For purposes of 
subparagraph (A), a qualified nonprofit housing 
project is described in this subparagraph if a 
qualified nonprofit organization is to own an in-
terest in the project (directly or through a part-
nership) and materially participate (within the 
meaning of section 469(h)) in the development 
and operation of the project throughout the 
credit period.