Exception for certain loans

(A) General rule

Exception for certain loans

(A) General rule

Paragraph (1) shall not apply to any loan to the extent that such loan (when added to the outstanding balance of all other loans from such plan whether made on, before, or after August 13, 1982 ), does not exceed the lesser of—

(i) $50,000, reduced by the excess (if any) of— (I) the highest outstanding balance of loans from the plan during the 1-year period ending on the day before the date on which such loan was made, over (II) the outstanding balance of loans from the plan on the date on which such loan was made, or

(ii) the greater of (I) one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan, or (II) $10,000.

For purposes of clause (ii), the present value of the nonforfeitable accrued benefit shall be determined without regard to any accumulated deductible employee contributions (as defined in subsection ( o )(5)(B)).

(A)(i)#

$50,000, reduced by the excess (if any) of—

(I) the highest outstanding balance of loans from the plan during the 1-year period ending on the day before the date on which such loan was made, over

(II) the outstanding balance of loans from the plan on the date on which such loan was made, or

(A)(i)(I)#

the highest outstanding balance of loans from the plan during the 1-year period ending on the day before the date on which such loan was made, over

(A)(i)(II)#

the outstanding balance of loans from the plan on the date on which such loan was made, or

(A)(ii)#

the greater of (I) one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan, or (II) $10,000.

(B)Requirement that loan be repayable within 5 years#

(i) In general Subparagraph (A) shall not apply to any loan unless such loan, by its terms, is required to be repaid within 5 years.

(ii) Exception for home loans Clause (i) shall not apply to any loan used to acquire any dwelling unit which within a reasonable time is to be used (determined at the time the loan is made) as the principal residence of the participant.

(B)(i)In general#

Subparagraph (A) shall not apply to any loan unless such loan, by its terms, is required to be repaid within 5 years.

(B)(ii)Exception for home loans#

Clause (i) shall not apply to any loan used to acquire any dwelling unit which within a reasonable time is to be used (determined at the time the loan is made) as the principal residence of the participant.

(C)Requirement of level amortization#

Except as provided in regulations, this paragraph shall not apply to any loan unless substantially level amortization of such loan (with payments not less frequently than quarterly) is required over the term of the loan.

(D)Prohibition of loans through credit cards and other similar arrangements#

Subparagraph (A) shall not apply to any loan which is made through the use of any credit card or any other similar arrangement.

(E)Related employers and related plans#

For purposes of this paragraph—

(i) the rules of subsections (b), (c), and (m) of section 414 shall apply, and

(ii) all plans of an employer (determined after the application of such subsections) shall be treated as 1 plan.

(E)(i)#

the rules of subsections (b), (c), and (m) of section 414 shall apply, and

(E)(ii)#

all plans of an employer (determined after the application of such subsections) shall be treated as 1 plan.