Homebuyer Tools, Calculators and Look-ups
Recapture Tax
In rare circumstances, a
Federal Recapture Tax may be assessed against a CHFA home
loan borrower at the time the borrower sells the home. Federal
recapture taxes only apply to homes purchased with Tax-Exempt,
Mortgage Revenue Bonds, like those offered by CHFA. All of the
following conditions must exist at the time of the sale of
the home to trigger repayment of the recapture tax.
- A borrower sells the home within nine years of purchase.
- A borrower sells the home for more than the borrower
paid for it.
- A borrower's household income is greater than the
federal
recapture tax income limits effective at the time of the
purchase.
Please note: CHFA borrowers will receive
IRS Form 8828
and
instructions at
their loan closing. This form indicates the federal income
limits effective during the nine years of ownership when the
federal recapture tax may come due if the above conditions
are present. Please save this document. Consult a tax
professional if you have any questions.
| Related Documents |
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| File | Size | Type | Recap Tax – Income Limits 048-0405
This chart lists the threshold income limits for recapture tax liability based on geographic location of the home and the number of years of ownership | 19K | pdf |
| Recap Tax – Notice to Homebuyer 050-0597
This form is signed by a CHFA loan applicant to certify that the applicant has been informed of his potential liability to pay the Recapture Tax and is submitted with the loan request. | 10K | pdf |
| Recap Tax – Notice to Homebuyer 051-0597
This two-page fact sheet explains the Recapture Tax to a loan applicant. | 4K | pdf |
| Recap Tax – Notice to Mortgagor 052-1195
This legal notice of the maximum Recapture Tax due upon the premature selling of a CHFA-financed home must be provided to borrower and signed by borrower at the loan closing. | 9K | pdf | | File | Size | Type |
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