Recapture Tax Reimbursement
OHFA is pleased to announce that recapture tax is no longer an obstacle for participants utilizing our homeownership products.
What is Recapture Tax?
Recapture tax is associated with OHFA's homeownership products. Basically, recapture tax is a federal tax or fee a homebuyer may have to pay if he/she (1) sells the OHFA-financed home within the first nine years of the purchase date, (2) receives a net profit on the sale of the home, and (3) exceeds the maximum OHFA household income limit at the time of sale. All three provisions must occur at the time of sale for any potential recapture tax obligation to apply.
The Internal Revenue Service (IRS) requires recapture tax because OHFA mortgages are funded through the sale of tax-free mortgage revenue bonds. The provision helps ensure compliance with OHFA’s stated purpose of helping low- to moderate-income homebuyers.
Effective March 1, 2006, OHFA will reimburse homebuyers for the actual amount of recapture tax paid to the IRS on loans closed on or after the effective date.
In the past, the term "recapture tax" caused potential homebuyers to think twice about buying their home. However, through extensive research, OHFA has found that very few people have ever had to pay the penalty for selling their homes early. By providing assistance in the rare instances where recapture tax is required, OHFA is helping to create stronger communities by allowing Ohioans to purchase safe, quality, affordable homes with confidence.
Requesting Recapture Tax Reimbursement
To complete the reimbursement process, complete the Request for Recapture Tax Reimbursement form and fax it to 614.995.0487 or mail it to:
Ohio Housing Finance Agency
Attention: Office of Homeownership
57 East Main Street
Columbus, Ohio 43215
The form is in Adobe PDF file format and must be viewed with Adobe Reader. If you do not have Adobe Reader, a free version can be downloaded from Adobe's web site.
Request for Recapture Tax Reimbursement (93 KB Adobe PDF File)