What is qualified principal residence indebtedness?

Qualified principal residence indebtedness includes:

• Any debt incurred in acquiring, constructing, or substantially improving a principal residence that is secured by the principal residence
• Any debt secured by the principal residence resulting from the refinancing of debt incurred to acquire, construct, or substantially improve a principal residence, but only to the extent that the amount does not exceed the amount of the refinanced indebtedness

A principal residence is generally the home where the taxpayer lives most of the time. A taxpayer can have only one principal residence at a time.