A bill to provide loans under the Small Business Act for the removal of urea-formaldehyde foam insulation from residences, to provide for certain tax expenditures relating to problems caused by such insulation, and for other purposes.

Amends the Small Business Act to authorize the Small Business Administration (SBA) to make loans for the removal of urea-formaldehyde foam insulation from residences. Limits each such loan to a maximum of $10,000. Makes such loans available only to the extent that loss or damage with respect to urea-formaldehyde foam insulation removal is not covered by insurance.

Authorizes the SBA to make $10,000,000 in direct and immediate participation loans to manufacturers and installers of urea-formaldehyde foam insulation in each of FY 1983 and 1984.

Provides that the dollar limitation with respect to the residential energy credit shall not be reduced by energy conservation expenditures by a taxpayer for urea-formaldehyde foam insulation.

Allows a medical expense deduction for the costs associated with removal of urea-formaldehyde foam insulation from a taxpayer's residence.