Here's an announcement directly from the current NIH Guide:
NIH announces a change in the existing policy on resubmission (amended) applications (see http://grants.nih.gov/grants/policy/amendedapps.htm). Beginning with original new applications (i.e., never submitted) and competing renewal applications submitted for the January 25, 2009 due dates and beyond, the NIH will accept only a single amendment to the original application. Failure to receive funding after two submissions (i.e., the original and the single amendment) will mean that the applicant should substantially re-design the project rather than simply change the application in response to previous reviews. It is expected that this policy will lead to funding high quality applications earlier, with fewer resubmissions.