I 
110TH CONGRESS 
2D SESSION 
H. R. 5962 
To amend the Internal Revenue Code of 1986 to provide temporary housing 
related tax relief for individuals, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 5, 2008 
Mr. MARIO DIAZ-BALART of Florida (for himself, Mr. DAVIS of Illinois, Mr. 
LINCOLN DIAZ-BALART of Florida, Mr. TIM MURPHY of Pennsylvania, 
Mr. PAUL, Ms. ROS-LEHTINEN, and Mr. TURNER) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
temporary housing related tax relief for individuals, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Keep Our Homes Act 
of 2008’’. 
SEC. 2. TEMPORARY DEDUCTION FOR CERTAIN MORTGAGE 
COUNSELING. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
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additional itemized deductions) is amended by redesig-
nating section 224 as section 225 and by inserting after 
section 223 the following new section: 
‘‘SEC. 224. CERTAIN MORTGAGE COUNSELING. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a deduction an amount equal to 
the amount paid or incurred by the taxpayer during the 
taxable year for qualified mortgage counseling. 
‘‘(b) LIMITATION.—The deduction allowed under sub-
section (a) shall not exceed $500 for any taxable year. 
‘‘(c) QUALIFIED MORTGAGE COUNSELING.—For pur-
poses of this section, the term ‘qualified mortgage coun-
seling’ means any mortgage counseling provided by an or-
ganization accredited by the Federal Housing Administra-
tion to provide such counseling if such counseling is ob-
tained before the issuance of the loan with respect to 
which such counseling relates. Such term shall not include 
any counseling if such counseling is provided with respect 
to a loan which is not secured by the principal residence 
(within the meaning of section 121) of the taxpayer. 
‘‘(d) TERMINATION.—The deduction under this sec-
tion shall not be allowed with respect to any amount paid 
or incurred after December 31, 2012.’’. 
(b) DEDUCTION
ALLOWED
IN
COMPUTING
AD-
JUSTED GROSS INCOME.—Subsection (a) of section 62 of 
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such Code is amended by inserting before the last sentence 
the following new paragraph: 
‘‘(21) CERTAIN MORTGAGE COUNSELING.—The 
deduction allowed by section 224.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by redesignating the item relating to section 
224 as an item relating to section 225 and inserting before 
such item the following new item: 
‘‘Sec. 224. Certain mortgage counseling.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 3. TEMPORARY DEDUCTION FOR UPSIDE DOWN MORT-
GAGES. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
additional itemized deductions), as amended by this Act, 
is amended by redesignating section 225 as section 226 
and by inserting after section 224 the following new sec-
tion: 
‘‘SEC. 225. UPSIDE DOWN MORTGAGES. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a deduction an amount equal to 
20 percent of the excess (if any) of— 
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‘‘(1) the acquisition indebtedness (within the 
meaning of section 163) as determined at the close 
of the taxable year with respect to the principal resi-
dence (within the meaning of section 121) of the 
taxpayer, over 
‘‘(2) the valuation (as in effect at the close of 
such taxable year) of such residence as determined 
for purposes of State and local real property tax as-
sessments. 
‘‘(b) LIMITATION.—The deduction allowed under sub-
section (a) shall not exceed $5,000 for any taxable year. 
‘‘(c) DENIAL OF BENEFIT FOR FRAUDULENTLY OB-
TAINED MORTGAGES.—Acquisition indebtedness shall not 
be taken into account under subsection (a) if material 
misstatements were made by the taxpayer in obtaining 
such indebtedness. 
‘‘(d) TERMINATION.—The deduction under this sec-
tion shall not be allowed with respect to any amount paid 
or incurred after December 31, 2009.’’. 
(b) DEDUCTION
ALLOWED
IN
COMPUTING
AD-
JUSTED GROSS INCOME.—Subsection (a) of section 62 of 
such Code, as amended by this Act, is amended by insert-
ing before the last sentence the following new paragraph: 
‘‘(22) UPSIDE DOWN MORTGAGES.—The deduc-
tion allowed by section 224.’’. 
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(c) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code, 
as amended by this Act, is amended by redesignating the 
item relating to section 225 as an item relating to section 
226 and inserting before such item the following new item: 
‘‘Sec. 225. Upside down mortgages.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 4. TEMPORARY CREDIT FOR CERTAIN HOME PUR-
CHASES. 
(a) ALLOWANCE OF CREDIT.—Subpart A of part IV 
of subchapter A of chapter 1 of the Internal Revenue Code 
of 1986 (relating to nonrefundable personal credits) is 
amended by inserting after section 25D the following new 
section: 
‘‘SEC. 25E. CREDIT FOR CERTAIN HOME PURCHASES. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—In the case of an individual 
who is a purchaser of a qualified principal residence 
during the taxable year, there shall be allowed as a 
credit against the tax imposed by this chapter an 
amount equal to the lesser of— 
‘‘(A) 10 percent of the purchase price of 
the residence, or 
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‘‘(B) $7,500 ($9,000 if such residence is in 
a high cost area (as determined by the Sec-
retary of Housing and Urban Development)). 
‘‘(2) ALLOCATION OF CREDIT AMOUNT.—The 
amount of the credit allowed under paragraph (1) 
shall be equally divided among the 2 taxable years 
beginning with the taxable year in which the pur-
chase of the qualified principal residence is made. 
‘‘(b) LIMITATIONS.— 
‘‘(1) DATE OF PURCHASE.—The credit allowed 
under subsection (a) shall be allowed only with re-
spect to purchases made— 
‘‘(A) after the date of the enactment of 
this section, and 
‘‘(B) before the date that is 12 months 
after such date. 
‘‘(2) LIMITATION
BASED
ON
MODIFIED
AD-
JUSTED GROSS INCOME.— 
‘‘(A) IN GENERAL.—The amount allowable 
as a credit under subsection (a) (determined 
without regard to this paragraph) for the tax-
able year shall be reduced (but not below zero) 
by the amount which bears the same ratio to 
the amount which is so allowable as— 
‘‘(i) the excess (if any) of— 
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‘‘(I) the taxpayer’s modified ad-
justed gross income for such taxable 
year, over 
‘‘(II) $70,000 ($140,000 in the 
case of a joint return), bears to 
‘‘(ii) $20,000. 
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of subparagraph (A), the 
term ‘modified adjusted gross income’ means 
the adjusted gross income of the taxpayer for 
the taxable year increased by any amount ex-
cluded from gross income under section 911, 
931, or 933. 
‘‘(3) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.—In the case of a taxable year to which section 
26(a)(2) does not apply, the credit allowed under 
subsection (a) for any taxable year shall not exceed 
the excess of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under this subpart (other than this section and 
section 23) for the taxable year. 
‘‘(4) ONE-TIME ONLY.— 
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‘‘(A) IN GENERAL.—If a credit is allowed 
under this section in the case of any individual 
(and such individual’s spouse, if married) with 
respect to the purchase of any qualified prin-
cipal residence, no credit shall be allowed under 
this section in any taxable year with respect to 
the purchase of any other qualified principal 
residence by such individual or a spouse of such 
individual. 
‘‘(B) JOINT PURCHASE.—In the case of a 
purchase of a qualified principal residence by 2 
or more unmarried individuals or by 2 married 
individuals filing separately, no credit shall be 
allowed under this section if a credit under this 
section has been allowed to any of such individ-
uals in any taxable year with respect to the 
purchase of any other qualified principal resi-
dence. 
‘‘(c) QUALIFIED PRINCIPAL RESIDENCE.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified prin-
cipal residence’ means any residence that is pur-
chased to be the principal residence of the pur-
chaser. 
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‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin-
cipal residence’ has the same meaning as when used 
in section 121. 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No credit shall 
be allowed under this section for any purchase for which 
a credit is allowed under section 1400C. 
‘‘(e) RECAPTURE IN THE CASE OF CERTAIN DISPOSI-
TIONS.—In the event that a taxpayer— 
‘‘(1) disposes of the qualified principal resi-
dence with respect to which a credit is allowed under 
subsection (a), or 
‘‘(2) fails to occupy such residence as the tax-
payer’s principal residence, 
at any time within 24 months after the date on which the 
taxpayer purchased such residence, then the remaining 
portion of the credit allowed under subsection (a) shall be 
disallowed in the taxable year during which such disposi-
tion occurred or in which the taxpayer failed to occupy 
the residence as a principal residence, and in any subse-
quent taxable year in which the remaining portion of the 
credit would, but for this subsection, have been allowed. 
‘‘(f) SPECIAL RULES.— 
‘‘(1) JOINT PURCHASE.— 
‘‘(A) MARRIED INDIVIDUALS FILING SEPA-
RATELY.—In the case of 2 married individuals 
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filing separately, subsection (a) shall be applied 
to each such individual by substituting ‘$3,500’ 
for ‘$7,000’ in paragraph (1) thereof. 
‘‘(B) UNMARRIED INDIVIDUALS.—If 2 or 
more individuals who are not married purchase 
a qualified principal residence, the amount of 
the credit allowed under subsection (a) shall be 
allocated among such individuals in such man-
ner as the Secretary may prescribe, except that 
the total amount of the credits allowed to all 
such individuals shall not exceed $7,000. 
‘‘(2) PURCHASE; 
PURCHASE
PRICE.—Rules 
similar to the rules of paragraphs (2) and (3) of sec-
tion 1400C(e) (as in effect on the date of the enact-
ment of this section) shall apply for purposes of this 
section. 
‘‘(3) REPORTING REQUIREMENT.—Rules similar 
to the rules of section 1400C(f) (as so in effect) 
shall apply for purposes of this section. 
‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section with respect 
to the purchase of any residence, the basis of such resi-
dence shall be reduced by the amount of the credit so al-
lowed.’’. 
(b) CONFORMING AMENDMENTS.— 
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(1) Section 24(b)(3)(B) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and 25B’’ 
and inserting ‘‘, 25B, and 25E’’. 
(2) Section 25(e)(1)(C)(ii) of such Code is 
amended by inserting ‘‘25E,’’ after ‘‘25D,’’. 
(3) Section 25B(g)(2) of such Code is amended 
by striking ‘‘section 23’’ and inserting ‘‘sections 23 
and 25E’’. 
(4) Section 25D(c)(2) of such Code is amended 
by striking ‘‘and 25B’’ and inserting ‘‘25B, and 
25E’’. 
(5) Section 26(a)(1) of such Code is amended 
by striking ‘‘and 25B’’ and inserting ‘‘25B, and 
25E’’. 
(6) Section 904(i) of such Code is amended by 
striking ‘‘and 25B’’ and inserting ‘‘25B, and 25E’’. 
(7) Subsection (a) of section 1016 of such Code 
is amended by striking ‘‘and’’ at the end of para-
graph (36), by striking the period at the end of 
paragraph (37) and inserting ‘‘, and’’, and by add-
ing at the end the following new paragraph: 
‘‘(38) to the extent provided in section 
25E(g).’’. 
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(8) Section 1400C(d)(2) of such Code is 
amended by striking ‘‘and 25D’’ and inserting 
‘‘25D, and 25E’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by in-
serting after the item relating to section 25D the following 
new item: 
‘‘Sec. 25E. Credit for certain home purchases.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to purchases in taxable years end-
ing after the date of the enactment of this Act. 
(e) APPLICATION
OF
EGTRRA SUNSET.—The 
amendment made by subsection (b)(1) shall be subject to 
title IX of the Economic Growth and Tax Relief Reconcili-
ation Act of 2001 in the same manner as the provisions 
of such Act to which such amendment relates. 
SEC. 5. TEMPORARY ADDITIONAL STANDARD DEDUCTION 
FOR 
REAL 
PROPERTY 
TAXES 
FOR 
NON-
ITEMIZERS. 
(a) IN GENERAL.—Section 63(c)(1) of the Internal 
Revenue Code of 1986 (defining standard deduction) is 
amended by striking ‘‘and’’ at the end of subparagraph 
(A), by striking the period at the end of subparagraph 
(B) and inserting ‘‘, and’’, and by adding at the end the 
following new subparagraph: 
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‘‘(C) in the case of any taxable year begin-
ning in 2008 or 2009, the real property tax de-
duction.’’. 
(b) DEFINITION.—Section 63(c) of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new paragraph: 
‘‘(8) REAL PROPERTY TAX DEDUCTION.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the real property tax deduction is so 
much of the amount of the eligible State and 
local real property taxes paid or accrued by the 
taxpayer during the taxable year which do not 
exceed $500 ($1,000 in the case of a joint re-
turn). 
‘‘(B) ELIGIBLE STATE AND LOCAL REAL 
PROPERTY TAXES.—For purposes of subpara-
graph (A), the term ‘eligible State and local 
real property taxes’ means State and local real 
property taxes (within the meaning of section 
164), but only if the rate of tax for all residen-
tial real property taxes in the jurisdiction has 
not been increased at any time after April 2, 
2008, and before January 1, 2009.’’. 
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