Mass Housing and The Recapture Tax Explained – Boston Mortgage

One question I get asked a lot from people who are looking into Mass Housing loans is:

Do I have to pay a recapture tax on Mass Housing loans?

If your mortgage loan was financed for funds made available by Mass Housing through the sale of tax exempt mortgage revenue bonds, current federal tax law may require you to pay a subsidy recapture tax to the federal government if you sell or otherwise transfer your house within the first nine years after the closing date of your mortgage loan.

If you refinance your mortgage loan within the first nine years but do not otherwise sell or transfer your home, no subsidy recapture will be due at the time of refinancing.

However, you may have to make a payment of subsidy recapture if you subsequently sell or otherwise transfer your home within the original nine year period.

The good news is this: if your mortgage loan was closed on or after January 1, 2006, Mass Housing will reimburse you for the amount of any recaptured tax that you pay.

So essentially, if you’re buying a home today don’t worry about the recapture tax.

Phil Ganz (354 Posts)

Philip D. Ganz is a Boston Mortgage Broker and Boston Home Loan specialist. For information, expertise, consulting, or advice about home loans, refinancing mortgages, or commercial property loans, contact Phil with no obligation: 617-529-9317


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