SUBSIDY RECAPTURE TAX DISCLOSURE NOTICE Homeownership Division SFN 58272 Rev. 06/17 NOTICE OF POTENTIAL RECAPTURE TAX ON SALE OF HOME Because you are receiving a mortgage loan from the proceeds on a tax-exempt bond, you are receiving the benefit of a lower interest rate than is customarily charged on other mortgage loans. If you sell or otherwise dispose of your home during the next nine years, this benefit may be recaptured. The recapture is accomplished by an increase in your federal income tax for the year in which you sell your home. The recapture only applies if you sell your home at a gain and if your income increases above specified levels. You may wish to consult a tax advisor or the local office of the Internal Revenue Service at the time you sell your home to determine the amount, if any, of the recapture. Along with this notice, you are being given additional information that will be needed to calculate the recapture tax. See page 2 for information on the Recapture Tax Reimbursement Program. NOTICE TO MORTGAGOR OF MAXIMUM RECAPTURE TAX AND OF METHOD TO COMPUTE RECAPTURE TAX ON SALE OF HOME Introduction A. General: When you sell your home, you may have to pay a recapture tax as calculated below. The recapture tax may also apply if you dispose of your home in some other way. Any reference in this notice to the sale of your home also includes other ways of disposing of your home. For instance, you may owe the recapture tax if you give your home to a relative. B. Exceptions: In the following situations, no recapture tax is due and you do not need to do the calculations. 1. You dispose of your home later than nine years after you close your mortgage loan. 2. Your home is disposed of as a result of your death. 3. You transfer your home either to your spouse or to your former spouse incident to divorce. 4. You realize no gain in the sale or disposition of your home. 5. Your income is below the adjusted federal qualifying income listed in the attached tables for the county in which the property is located. Maximum Recapture Tax The maximum recapture tax that you may be required to pay as an addition to your federal income tax in an amount equal to 6.25% of the highest principal amount of your mortgage loan and is referred to as your federally subsidized amount with respect to the loan. Your federally subsidized amount is calculated as follows: $ x 6.25% = $ Original Mortgage Amount Federally Subsidized Amount Actual Recapture Tax The actual recapture tax, if any, can only be determined when you sell your home and is the lesser of 50% of your gain on the sale of your home or your recapture amount determined as follows: the maximum recapture tax (as described in above) x the holding period percentage, as listed in the attached tables. Special Rules on Income If your Modified Adjusted Gross Income does not exceed the applicable amount in the year of sale or disposition of the home, you will owe no recapture tax. If your Modified Adjusted Gross Income exceeds the amount shown by less than $5,000, your recapture tax will be reduced according to a formula set forth in Section 143(m) of the Internal Revenue Code. There will be no reduction if your Modified Adjusted Gross Income exceeds the amount shown by $5,000 or more. Modified Adjusted Gross Income is the adjusted gross income shown on your federal tax return plus interest received or accrued on tax-exempt obligations minus the amount of your gain from the sale or disposition of the residence. SFN 58272 (Rev. 06/17) 701/328-8080 Fax: 701/328-8090 Toll Free 800/292-8621 800/366-6888 (TTY) Page 1 of 6
Limitations and Special Rules on Recapture Tax A. If you give away your home (other than to your spouse or ex-spouse incident to divorce), you must determine your actual recapture tax as if you had sold your home for its fair market value. B. If your home is destroyed by fire, storm, flood or other casualty, there generally is not recapture tax if, within two years, you purchase additional property for use as your principal residence on the site of the home financed with your original subsidized mortgage loan. C. In general, except as provided in future regulations, if two or more persons own a home and are jointly liable for the subsidized mortgage loan, the actual recapture tax is determined separately for them based on their interest in the home. D. If you repay your loan in full during the nine year recapture period and you sell your home during this period, your holding period percentage may be reduced under the special rule in Section 143 (m)(4)(c)(ii) of the Internal Revenue Code. You should consult your tax advisor or the local office of the Internal Revenue Service at the time of resale or other disposition of the home to determine the amount, if any, of the recapture tax. If you are subject to a recapture tax, North Dakota Housing Finance Agency has a Recapture Tax Reimbursement Program whereby it will reimburse you for any recapture tax related to the sale or disposition of your home. A claim form is available at www.ndhfa.org or by contacting the Agency directly at 800-292-8621 or hfainfo@nd.gov. I (We) acknowledge receipt of a copy of this Subsidy Recapture Tax Disclosure Notice and the Adjusted Qualifying Income Table. Mortgagor Date Co-Mortgagor Date Mortgagor Date Co-Mortgagor Date Ph: 701/328-8080 Fax: 701/328-8090 Toll Free 800/292-8621 800/366-6888 (TTY) Page 2 of 6
ADJUSTED QUALIFYING INCOME TABLES (Household income at the time the borrower sells the home, in the county in which said home is located.) All counties except Billings, Bowman, Burleigh/Morton, Cavalier, Dunn, McKenzie, Mercer, Mountrail, Oliver, Renville, Stark, Ward, Williams Less than 1 20 $77,600 $89,240 1 or more, but less than 2 40 $81,480 $93,702 2 or more, but less than 3 60 $85,554 $98,387 3 or more, but less than 4 80 $89,832 $103,306 4 or more, but less than 5 100 $94,323 $108,472 5 or more, but less than 6 80 $99,039 $113,895 6 or more, but less than 7 60 $103,991 $119,590 7 or more, but less than 8 40 $109,191 $125,570 8 or more, but less than 9 20 $114,651 $131,848 Billings County Less than 1 20 $98,400 $113,160 1 or more, but less than 2 40 $103,320 $118,818 2 or more, but less than 3 60 $108,486 $124,759 3 or more, but less than 4 80 $113,910 $130,997 4 or more, but less than 5 100 $119,606 $137,547 5 or more, but less than 6 80 $125,586 $144,424 6 or more, but less than 7 60 $131,865 $151,645 7 or more, but less than 8 40 $138,459 $159,227 8 or more, but less than 9 20 $145,382 $167,189 Bowman County Less than 1 20 $84,500 $97,175 1 or more, but less than 2 40 $88,725 $102,034 2 or more, but less than 3 60 $93,161 $107,135 3 or more, but less than 4 80 $97,819 $112,482 4 or more, but less than 5 100 $102,710 $118,117 5 or more, but less than 6 80 $107,846 $124,023 6 or more, but less than 7 60 $113,238 $130,224 7 or more, but less than 8 40 $118,900 $136,735 8 or more, but less than 9 20 $124,845 $143,572 Burleigh/Morton County Less than 1 20 $88,300 $101,545 1 or more, but less than 2 40 $92,715 $106,622 2 or more, but less than 3 60 $97,351 $111,953 3 or more, but less than 4 80 $102,218 $117,551 4 or more, but less than 5 100 $107,329 $123,429 5 or more, but less than 6 80 $112,696 $129,600 6 or more, but less than 7 60 $118,330 $136,080 7 or more, but less than 8 40 $124,247 $142,884 8 or more, but less than 9 20 $130,459 $150,028 1 Measured from closing date of your loan 2 Number of people living in the Borrower s home at time of resale. Ph: 701/328-8080 Fax: 701/328-8090 Toll Free 800/292-8621 800/366-6888 (TTY) Page 3 of 6
Cavalier County ADJUSTED QUALIFYING INCOME TABLES (Household income at the time the borrower sells the home, in the county in which said home is located.) Less than 1 20 $81,900 $94,185 1 or more, but less than 2 40 $85,995 $98,894 2 or more, but less than 3 60 $90,295 $103,839 3 or more, but less than 4 80 $94,809 $109,031 4 or more, but less than 5 100 $99,500 $114,482 5 or more, but less than 6 80 $104,527 $120,207 6 or more, but less than 7 60 $109,754 $126,217 7 or more, but less than 8 40 $115,242 $132,528 8 or more, but less than 9 20 $121,004 $139,154 Dunn County Less than 1 20 $80,700 $92,805 1 or more, but less than 2 40 $84,735 $94,445 2 or more, but less than 3 60 $88,972 $102,318 3 or more, but less than 4 80 $93,420 $107,433 4 or more, but less than 5 100 $98,091 $112,805 5 or more, but less than 6 80 $102,996 $118,445 6 or more, but less than 7 60 $108,146 $124,368 7 or more, but less than 8 40 $113,553 $130,586 8 or more, but less than 9 20 $119,231 $137,115 McKenzie County Less than 1 20 $89,500 $102,925 1 or more, but less than 2 40 $93,975 $108,071 2 or more, but less than 3 60 $98,674 $113,475 3 or more, but less than 4 80 $103,607 $119,149 4 or more, but less than 5 100 $108,788 $125,106 5 or more, but less than 6 80 $114,227 $131,361 6 or more, but less than 7 60 $119,939 $137,929 7 or more, but less than 8 40 $125,935 $144,826 8 or more, but less than 9 20 $132,232 $152,067 Mercer County Less than 1 20 $83,800 $96,370 1 or more, but less than 2 40 $87,990 $101,189 2 or more, but less than 3 60 $92,390 $106,248 3 or more, but less than 4 80 $97,009 $111,560 4 or more, but less than 5 100 $101,859 $117,138 5 or more, but less than 6 80 $106,952 $122,995 6 or more, but less than 7 60 $112,300 $129,145 7 or more, but less than 8 40 $117,915 $135,602 8 or more, but less than 9 20 $123,811 $142,382 1 Measured from closing date of your loan 2 Number of people living in the Borrower s home at time of resale. Ph: 701/328-8080 Fax: 701/328-8090 Toll Free 800/292-8621 800/366-6888 (TTY) Page 4 of 6
Mountrail County Less than 1 20 $79,000 $90,850 1 or more, but less than 2 40 $82,950 $95,393 2 or more, but less than 3 60 $87,098 $100,162 3 or more, but less than 4 80 $91,452 $105,170 4 or more, but less than 5 100 $96,025 $110,429 5 or more, but less than 6 80 $100,826 $115,950 6 or more, but less than 7 60 $105,868 $121,748 7 or more, but less than 8 40 $111,161 $127,835 8 or more, but less than 9 20 $116,719 $134,227 Oliver County Less than 1 20 $83,600 $96,140 1 or more, but less than 2 40 $87,780 $100,947 2 or more, but less than 3 60 $92,169 $105,994 3 or more, but less than 4 80 $96,777 $111,294 4 or more, but less than 5 100 $101,616 $116,859 5 or more, but less than 6 80 $106,697 $122,702 6 or more, but less than 7 60 $112,032 $128,837 7 or more, but less than 8 40 $117,634 $135,279 8 or more, but less than 9 20 $123,515 $142,043 Renville County Less than 1 20 $85,300 $98,095 1 or more, but less than 2 40 $89,565 $103,000 2 or more, but less than 3 60 $94,043 $108,150 3 or more, but less than 4 80 $98,745 $113,557 4 or more, but less than 5 100 $103,683 $119,235 5 or more, but less than 6 80 $108,867 $125,197 6 or more, but less than 7 60 $114,310 $131,457 7 or more, but less than 8 40 $120,026 $138,030 8 or more, but less than 9 20 $126,027 $144,931 Stark County Less than 1 20 $84,700 $97,405 1 or more, but less than 2 40 $88,935 $102,275 2 or more, but less than 3 60 $93,382 $107,389 3 or more, but less than 4 80 $98,051 $112,758 4 or more, but less than 5 100 $102,953 $118,396 5 or more, but less than 6 80 $108,101 $124,316 6 or more, but less than 7 60 $113,506 $130,532 7 or more, but less than 8 40 $119,181 $137,059 8 or more, but less than 9 20 $125,140 $143,912 Ph: 701/328-8080 Fax: 701/328-8090 Toll Free 800/292-8621 800/366-6888 (TTY) Page 5 of 6
Ward County Less than 1 20 $84,000 $96,600 1 or more, but less than 2 40 $88,200 $101,430 2 or more, but less than 3 60 $92,610 $106,502 3 or more, but less than 4 80 $97,241 $111,827 4 or more, but less than 5 100 $102,103 $117,418 5 or more, but less than 6 80 $107,208 $123,289 6 or more, but less than 7 60 $112,568 $129,453 7 or more, but less than 8 40 $118,196 $135,926 8 or more, but less than 9 20 $124,106 $142,722 Williams County Less than 1 20 $96,700 $111,205 1 or more, but less than 2 40 $101,535 $116,765 2 or more, but less than 3 60 $106,612 $122,604 3 or more, but less than 4 80 $111,942 $128,734 4 or more, but less than 5 100 $117,539 $135,170 5 or more, but less than 6 80 $123,416 $141,929 6 or more, but less than 7 60 $129,587 $149,025 7 or more, but less than 8 40 $136,067 $156,477 8 or more, but less than 9 20 $142,870 $164,300 1 Measured from closing date of your loan 2 Number of people living in the Borrower s home at time of resale. Ph: 701/328-8080 Fax: 701/328-8090 Toll Free 800/292-8621 800/366-6888 (TTY) Page 6 of 6