For SDHDA First-time Homebuyer Loans closed on or after August 15, 2006, if you are required to pay a Recapture Tax to the Internal Revenue Service (IRS), SDHDA will reimburse you for the actual amount of the Recapture Tax paid to the IRS.
How does a Mortgagor Receive Reimbursement for the Recapture Tax that was Paid?
In order to be reimbursed for Recapture Tax you have paid, you must send your written request to SDHDA no later than July 15 of the calendar year immediately following the calendar year in which you sold or otherwise disposed of your home. For example, if you sell your home on August 15, 2007, SDHDA must receive your written request for reimbursement no later than July 15, 2008.
To request reimbursement of Recapture Tax you have paid, you must send the following original documents, signed by each Mortgagor (SDHDA will not accept copies or facsimiles), to SDHDA:
- Request for Recapture Tax Reimbursement (.pdf format);
-
IRS Form 4506 (or its equivalent) permitting SDHDA to obtain a copy of each Mortgagor’s federal tax return, including IRS Form 8828 (or its equivalent). SDHDA will pay any fees associated with obtaining a copy of your tax return; and
-
Any other documentation SDHDA may need to approve your request.
SDHDA’s approval of Recapture Tax reimbursement is subject to all terms and conditions contained in the Request for Recapture Tax Reimbursement form.
You may submit only one request for reimbursement. SDHDA will not reimburse you for any additional Recapture Tax you may owe under an amended tax return.
SDHDA will not calculate the amount of any Recapture Tax you may owe upon the sale or disposition of your home. If you need assistance, you should consult a personal tax advisor or the IRS.
You will need Adobe Reader to view PDF format documents. Download Reader for free. 
