Second loan, also for a primary residence

[doombuggy]

I received a message from a plan participant/trustee this morning in regards to his possibly taking out another loan from the plan. The plan allows for up to 2 o/s loans at a time, and has no limitations on the purpose. He was asking about the terms of a loan for the purchase of a primary residence, so I am assuming that this would be the reason for the new loan. The problem is, the loan he took out in 2000 was for 15 years and the purpose listed is "real estate expenses." Since the lengh of the loan was for more than 5 years, I would assume that this is for a home purchase.

Could he take out another loan to purchase a primary residence, even though his first loan is for same? My concern is that he has two loans of the same "type" o/s.

Thanks for your help!

[E as in ERISA]

Maybe he bought real estate in 2000 and had a house built on it during the past few years? I don't recall the specifics of the general tax rules on loan for a primary residence. There are some time lags. You might look under those rules -- can't remember the section -- but I believe that its referenced in 72(p) rules.

[TBob]

I don't see any reason why he could not get another PR loan. I will assume that there are no problems with the first loan meaning that the loan was actually for a primary residence so going beyond the 5 years is ok.

It seems reasonable that the participant could be trying to purchase another house at this time. Interest rates have definitely been favorable for convincing people to upgrade their domicile. I don't know if anything in the regs that would prevent it.