Hurricanes Katrina and Rita Recovery Homesteading Act of 2005

Hurricanes Katrina and Rita Recovery Homesteading Act of 2005 - Authorizes the Secretary of Housing and Urban Development (HUD) to transfer, without payment, federally owned (including property transferred to the Secretary from other agencies) or otherwise donated suitable residential property to state or local governments for use in an approved homestead program carried out by such governments in Alabama, Louisiana, and Mississippi in areas designated disaster areas due to Hurricanes Katrina and Rita. Authorizes reimbursement to agencies transferring property.

Sets forth approval criteria for a homestead program, including: (1) selection criteria that gives priority to displaced low-income families; (2) occupancy only pursuant to a written agreement which must be for a period of at least five years and which requires the occupant to make certain repairs.

Requires the Secretary to audit authorized activities and permits monetary and other penalties penalties for noncompliance.

Permits the waiver of certain environmental requirements.

Prohibits the transfer, acceptance, or conveyance of property under this Act five years after enactment.