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Federal Recapture
A tax that the borrower may have to pay if they sell their WHEDA financed Home. Federal Recapture applies only to Homes financed on or after January 1, 1991. 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 would account for the recapture tax when preparing taxes for the year during which the title changes hands. The federal government, not WHEDA, levies the recapture tax.
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