Congress has passed an $8 billion tax bill that provides special incentives to help revitalize and rebuild communities in the Gulf Coast states devastated by hurricanes Katrina and Rita.The bill (H.R. 4440) creates a Gulf Opportunity Zone where states and municipalities can issue tax-exempt bonds to finance commercial and residential projects. One provision allows state and local governments to use mortgage revenue bonds to finance low-interest loans so that individuals whose homes were destroyed can purchase a new home in the disaster area. Homeowners also can obtain low-interest loans of up to $150,000 to repair damaged homes. The bill includes an additional $1.1 billion in low-income housing tax credits for Louisiana, Mississippi, and Alabama and $1 billion in New Markets Tax Credit authority. The GO Zone Act will allow Louisiana to "issue bonds to build housing, roads, bridges, and industrial plants," Sen. Mary Landrieu, D-La. said. Other provisions provide tax incentives for businesses to rebuild in the GO Zone and tax relief for hurricane victims.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry