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Other Frequently Asked Questions
Additional Questions
Does WHEDA ever make a
loan when the borrower doesn't have any down payment from his own funds? Yes. Loans with fully gifted down payments of 10% or more are accepted on single-family properties or condominiums provided the gift donor is an immediate family member or a community-based organization. The 10% can be reduced for borrowers with an excellent credit history. If a borrower refinances a WHEDA
Home mortgage loan, will that trigger the need to pay a recapture tax? No, refinancing will not trigger the recapture tax. The event which could trigger the recapture tax, is the sale of the house when the title actually changes hands. The borrower will account for the recapture tax when preparing taxes for the year during which the title changes hands. It is worth noting that WHEDA Home Loan borrowers probably will not be subject to recapture tax. For recapture tax to come into play, the borrower's income would have to substantially increase between the time the house was purchased and the time it is re-sold. If the borrower's income does not go above the recapture limit, there will be no recapture tax. Also, if the borrower lives in the house for nine years and still has the WHEDA Home Loan, there is no recapture tax at all. The federal government, not WHEDA, levies the recapture tax.
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