Common use of Recapture of Federal Subsidy of Loans Clause in Contracts

Recapture of Federal Subsidy of Loans. APPLICANTS MAY BE REQUIRED TO SHARE GAIN ON THE DISPOSITION OF THE RESIDENCE WITH THE FEDERAL GOVERNMENT. UNDER THE CODE, THE BENEFIT OF THE TAX CREDIT PROVIDED UNDER THE PROGRAM MUST BE “RECAPTURED” UPON DISPOSITION OF THE RESIDENCE WITHIN NINE (9) YEARS OF ITS ACQUISITION. THE RECAPTURE IS ACCOMPLISHED BY MEANS OF A TAX LEVIED ON THE APPLICANT AS PART OF HIS OR HER INDIVIDUAL TAX LIABILITY WHEN THE RESIDENCE IS SOLD OR TRANSFERRED. THE MAXIMUM AMOUNT OF THE RECAPTURE IS EQUAL TO 6.25% OF THE HIGHEST PRINCIPAL AMOUNT OF THE LOAN FOR WHICH THE APPLICANT WAS LIABLE. THIS MAXIMUM AMOUNT IS REDUCED PRO RATA TO REFLECT SHORTER OR LONGER THAN FIVE (5) YEAR HOLDING PERIODS, DECREASING TO ZERO FOR SALES OCCURRING NINE (9) YEARS OR MORE AFTER THE RECAPTURE PERIOD BEGINS. THE MAXIMUM AMOUNT IS ALSO REDUCED OR ELIMINATED FOR TAXPAYERS WHOSE INCOME AT THE TIME OF DISPOSITION OF THEIR RESIDENCE IS LESS THAN THE FEDERALLY PRESCRIBED INCOME LIMIT. THE RECAPTURE AMOUNT IS SUBJECT TO A LIMIT OF 50% OF THE AMOUNT OF THE GAIN REALIZED ON DISPOSITION OF THE RESIDENCE. THE RECAPTURE PROVISION DOES NOT APPLY TO DISPOSITION OF A RESIDENCE BY REASON OF DEATH OR TO ANY DISPOSITION OCCURRING MORE THAN NINE (9) YEARS AFTER THE APPLICANT BECOMES LIABLE IN WHOLE OR IN PART FOR THE PAYMENT OF THE LOAN. THE LENDER MUST PROVIDE TO EACH APPLICANT, NOTICE (I) UPON ORIGINATION, THAT THE LOAN IS SUBJECT TO THE RECAPTURE PROVISIONS OF THE CODE, AND (II) WITHIN NINETY (90) DAYS OF ORIGINATION, OF THE FEDERALLY SUBSIDIZED AMOUNT AND THE MODIFIED AMOUNT APPLICABLE, DURING EACH OF THE NINE (9) YEARS FOLLOWING THE ORIGINATION OF THE LOAN, BASED ON QUALIFYING INCOME FOR EACH CATEGORY OF FAMILY SIZE. SUCH NOTICES SHALL BE SUBSTANTIALLY IN THE FORM OF THE RECAPTURE TAX NOTICES TO APPLICANT ATTACHED HERETO AS EXHIBIT A AND EXHIBIT B, RESPECTIVELY. IF SUCH NOTICES ARE GIVEN TO AN APPLICANT AND NO MCC IS ACTUALLY ISSUED TO SUCH APPLICANT, THE LENDER SHALL GIVE PROMPT WRITTEN NOTICE TO THE APPLICANT THAT THE RECAPTURE PROVISIONS ARE NOT APPLICABLE. INFORMATION RETURNS REQUIRED TO BE SUBMITTED BY REAL ESTATE BROKERS UNDER SECTION 6045(E) OF THE CODE, AND STATEMENTS OF SUCH RETURNS FURNISHED TO CUSTOMERS, MUST INDICATE WHETHER THE SELLER’S LOAN WAS FEDERALLY SUBSIDIZED WITHIN THE MEANING OF THE RECAPTURE REQUIREMENTS.

Recapture of Federal Subsidy of Loans. APPLICANTS MAY BE REQUIRED TO SHARE GAIN ON THE DISPOSITION OF THE RESIDENCE WITH THE FEDERAL GOVERNMENT. UNDER THE CODE, THE BENEFIT OF THE TAX CREDIT PROVIDED UNDER THE PROGRAM MUST BE “RECAPTURED” UPON DISPOSITION OF THE RESIDENCE WITHIN NINE (9) YEARS OF ITS ACQUISITION. THE RECAPTURE IS ACCOMPLISHED BY MEANS OF A TAX LEVIED ON THE APPLICANT AS PART OF HIS OR HER INDIVIDUAL TAX LIABILITY WHEN THE RESIDENCE IS SOLD OR TRANSFERRED. THE MAXIMUM AMOUNT OF THE RECAPTURE IS EQUAL TO 6.25% OF THE HIGHEST PRINCIPAL AMOUNT OF THE LOAN FOR WHICH THE APPLICANT WAS LIABLE. THIS MAXIMUM AMOUNT IS REDUCED PRO RATA TO REFLECT SHORTER OR LONGER THAN FIVE (5) YEAR HOLDING PERIODS, DECREASING TO ZERO FOR SALES OCCURRING NINE (9) YEARS OR MORE AFTER THE RECAPTURE PERIOD BEGINS. THE MAXIMUM AMOUNT IS ALSO REDUCED OR ELIMINATED FOR TAXPAYERS WHOSE INCOME AT THE TIME OF DISPOSITION OF THEIR RESIDENCE IS LESS THAN THE FEDERALLY PRESCRIBED INCOME LIMIT. THE RECAPTURE AMOUNT IS SUBJECT TO A LIMIT OF 50% OF THE AMOUNT OF THE GAIN REALIZED ON DISPOSITION OF THE RESIDENCE. THE RECAPTURE PROVISION DOES NOT APPLY TO DISPOSITION OF A RESIDENCE BY REASON OF DEATH OR TO ANY DISPOSITION OCCURRING MORE THAN NINE (9) YEARS AFTER THE APPLICANT BECOMES LIABLE IN WHOLE OR IN PART FOR THE PAYMENT OF THE LOAN. THE LENDER LENDERS MUST PROVIDE TO EACH APPLICANT, NOTICE (I) UPON ORIGINATION, THAT THE LOAN IS SUBJECT TO THE RECAPTURE PROVISIONS OF THE CODE, AND (II) WITHIN NINETY (90) DAYS OF ORIGINATION, OF THE FEDERALLY SUBSIDIZED AMOUNT AND THE MODIFIED AMOUNT APPLICABLE, DURING EACH OF THE NINE (9) YEARS FOLLOWING THE ORIGINATION OF THE LOAN, BASED ON QUALIFYING INCOME FOR EACH CATEGORY OF FAMILY SIZE. SUCH NOTICES SHALL BE SUBSTANTIALLY IN THE FORM OF THE RECAPTURE TAX NOTICES TO APPLICANT ATTACHED HERETO AS EXHIBIT A B AND EXHIBIT BC, RESPECTIVELY. IF SUCH NOTICES ARE GIVEN TO AN APPLICANT AND NO MCC IS ACTUALLY ISSUED TO SUCH APPLICANT, THE LENDER SHALL GIVE PROMPT WRITTEN NOTICE TO THE APPLICANT THAT THE RECAPTURE PROVISIONS ARE NOT APPLICABLE. INFORMATION RETURNS REQUIRED TO BE SUBMITTED BY REAL ESTATE BROKERS UNDER SECTION 6045(E) OF THE CODE, AND STATEMENTS OF SUCH RETURNS FURNISHED TO CUSTOMERS, MUST INDICATE WHETHER THE SELLER’S LOAN WAS FEDERALLY SUBSIDIZED WITHIN THE MEANING OF THE RECAPTURE REQUIREMENTS.

Recapture of Federal Subsidy of Loans. APPLICANTS MAY BE REQUIRED TO SHARE GAIN ON THE DISPOSITION OF THE RESIDENCE WITH THE FEDERAL GOVERNMENT. UNDER THE CODE, THE BENEFIT OF THE TAX CREDIT PROVIDED UNDER THE PROGRAM MUST BE “RECAPTURED” UPON DISPOSITION OF THE RESIDENCE WITHIN NINE (9) YEARS OF ITS ACQUISITION. THE RECAPTURE IS ACCOMPLISHED BY MEANS OF A TAX LEVIED ON THE APPLICANT AS PART OF HIS OR HER INDIVIDUAL TAX LIABILITY WHEN THE RESIDENCE IS SOLD OR TRANSFERRED. THE MAXIMUM AMOUNT OF THE RECAPTURE IS EQUAL TO 6.25% OF THE HIGHEST PRINCIPAL AMOUNT OF THE LOAN FOR WHICH THE APPLICANT WAS LIABLE. THIS MAXIMUM AMOUNT IS REDUCED PRO RATA TO REFLECT SHORTER OR LONGER THAN FIVE (5) YEAR HOLDING PERIODS, DECREASING TO ZERO FOR SALES OCCURRING NINE (9) YEARS OR MORE AFTER THE RECAPTURE PERIOD BEGINS. THE MAXIMUM AMOUNT IS ALSO REDUCED OR ELIMINATED FOR TAXPAYERS WHOSE INCOME AT THE TIME OF DISPOSITION OF THEIR RESIDENCE IS LESS THAN THE FEDERALLY PRESCRIBED INCOME LIMIT. THE RECAPTURE AMOUNT IS SUBJECT TO A LIMIT OF 50% OF THE AMOUNT OF THE GAIN REALIZED ON DISPOSITION OF THE RESIDENCE. THE RECAPTURE PROVISION DOES NOT APPLY TO DISPOSITION OF A RESIDENCE BY REASON OF DEATH OR TO ANY DISPOSITION OCCURRING MORE THAN NINE (9) YEARS AFTER THE APPLICANT BECOMES LIABLE IN WHOLE OR IN PART FOR THE PAYMENT OF THE LOAN. THE LENDER LENDERS MUST PROVIDE TO EACH APPLICANT, NOTICE (I) UPON ORIGINATION, THAT THE LOAN IS SUBJECT TO THE RECAPTURE PROVISIONS OF THE CODE, AND (II) WITHIN NINETY (90) DAYS OF ORIGINATION, OF THE FEDERALLY SUBSIDIZED AMOUNT AND THE MODIFIED AMOUNT APPLICABLE, DURING EACH OF THE NINE (9) YEARS FOLLOWING THE ORIGINATION OF THE LOAN, BASED ON QUALIFYING INCOME FOR EACH CATEGORY OF FAMILY SIZE. SUCH NOTICES SHALL BE SUBSTANTIALLY IN THE FORM OF THE RECAPTURE TAX NOTICES TO APPLICANT ATTACHED HERETO AS EXHIBIT A AND EXHIBIT B, RESPECTIVELY. IF SUCH NOTICES ARE GIVEN TO AN APPLICANT AND NO MCC IS ACTUALLY ISSUED TO SUCH APPLICANT, THE LENDER SHALL GIVE PROMPT WRITTEN NOTICE TO THE APPLICANT THAT THE RECAPTURE PROVISIONS ARE NOT APPLICABLE. INFORMATION RETURNS REQUIRED TO BE SUBMITTED BY REAL ESTATE BROKERS UNDER SECTION 6045(E) OF THE CODE, AND STATEMENTS OF SUCH RETURNS FURNISHED TO CUSTOMERS, MUST INDICATE WHETHER THE SELLER’S LOAN WAS FEDERALLY SUBSIDIZED WITHIN THE MEANING OF THE RECAPTURE REQUIREMENTS.

Recapture of Federal Subsidy of Loans. APPLICANTS MAY BE REQUIRED TO SHARE GAIN ON THE DISPOSITION OF THE RESIDENCE WITH THE FEDERAL GOVERNMENT. UNDER THE CODE, THE BENEFIT OF THE TAX CREDIT PROVIDED UNDER THE PROGRAM MUST BE “RECAPTURED” UPON DISPOSITION OF THE RESIDENCE WITHIN NINE (9) YEARS OF ITS ACQUISITION. THE RECAPTURE IS ACCOMPLISHED BY MEANS OF A TAX LEVIED ON THE APPLICANT AS PART OF HIS OR HER INDIVIDUAL TAX LIABILITY WHEN THE RESIDENCE IS SOLD OR TRANSFERRED. THE MAXIMUM AMOUNT OF THE RECAPTURE IS EQUAL TO 6.25% OF THE HIGHEST PRINCIPAL AMOUNT OF THE LOAN FOR WHICH THE APPLICANT WAS LIABLE. THIS MAXIMUM AMOUNT IS REDUCED PRO RATA TO REFLECT SHORTER OR LONGER THAN FIVE (5) YEAR HOLDING PERIODS, DECREASING TO ZERO FOR SALES OCCURRING NINE (9) YEARS OR MORE AFTER THE RECAPTURE PERIOD BEGINS. THE MAXIMUM AMOUNT IS ALSO REDUCED OR ELIMINATED FOR TAXPAYERS WHOSE INCOME AT THE TIME OF DISPOSITION OF THEIR RESIDENCE IS LESS THAN THE FEDERALLY PRESCRIBED INCOME LIMIT. THE RECAPTURE AMOUNT IS SUBJECT TO A LIMIT OF 50% OF THE AMOUNT OF THE GAIN REALIZED ON DISPOSITION OF THE RESIDENCE. THE RECAPTURE PROVISION DOES NOT APPLY TO DISPOSITION OF A RESIDENCE BY REASON OF DEATH OR TO ANY DISPOSITION OCCURRING MORE THAN NINE (9) YEARS AFTER THE APPLICANT BECOMES LIABLE IN WHOLE OR IN PART FOR THE PAYMENT OF THE LOAN. THE LENDER LENDERS MUST PROVIDE TO EACH APPLICANT, NOTICE (I) UPON ORIGINATION, THAT THE LOAN IS SUBJECT TO THE RECAPTURE PROVISIONS OF THE CODE, AND (II) WITHIN NINETY (90) DAYS OF ORIGINATION, OF THE FEDERALLY SUBSIDIZED AMOUNT AND THE MODIFIED AMOUNT APPLICABLE, DURING EACH OF THE NINE (9) YEARS FOLLOWING THE ORIGINATION OF THE LOAN, BASED ON QUALIFYING INCOME FOR EACH CATEGORY OF FAMILY SIZE. SUCH NOTICES SHALL BE SUBSTANTIALLY IN THE FORM OF THE RECAPTURE TAX NOTICES TO APPLICANT ATTACHED HERETO AS EXHIBIT A AND EXHIBIT B, RESPECTIVELY. IF SUCH NOTICES ARE GIVEN TO AN APPLICANT AND NO MCC IS ACTUALLY ISSUED TO SUCH APPLICANT, THE LENDER SHALL GIVE PROMPT WRITTEN NOTICE TO THE APPLICANT THAT THE RECAPTURE PROVISIONS ARE NOT APPLICABLE. INFORMATION RETURNS REQUIRED TO BE SUBMITTED BY REAL ESTATE BROKERS UNDER SECTION 6045(E) OF THE CODE, AND STATEMENTS OF SUCH RETURNS FURNISHED TO CUSTOMERS, MUST INDICATE WHETHER THE SELLER’S LOAN WAS FEDERALLY SUBSIDIZED WITHIN THE MEANING OF THE RECAPTURE REQUIREMENTS.NOTICE