If your loan was closed on or after May 19, 2004.

Recapture is a federal tax provision intended to prevent abuses of low-interest mortgage loan programs. The recapture tax provisions are invoked when the house is sold; and only if all three of the following conditions are met:

• There is a net profit on the sale of the home.
• There is a rapid and significant increase in household income.
• The home is sold within nine years of the closing date.
• Recapture tax is calculated and assessed when you file your income taxes for the year in which the property was sold.

IHFA has eliminated any worry about this tax if your loan closed on or after May 19, 2004. As long as no wage earner was included in the home for one year after the time the loan was made, IHFA will fully reimburse you for it.