109.03.5 Exhibit 5-F. Notice to Mortgagor of Potential Recapture Tax; Owner Occupancy Requireme...
AR ADC 109.03.5 Exhibit 5-FArkansas Administrative Code
Ark. Admin. Code 109.03.5 Exhibit 5-F
109.03.5 Exhibit 5-F. Notice to Mortgagor of Potential Recapture Tax; Owner Occupancy Requirement; Purchase Price Limits and Income Limits; Final Shipping Date.
EXHIBIT 5-F
NOTICE TO MORTGAGOR OF POTENTIAL RECAPTURE TAX; OWNER OCCUPANCY REQUIREMENT; PURCHASE PRICE LIMITS AND INCOME LIMITS; FINAL SHIPPING DATE
TO BE DELIVERED TO MORTGAGOR AT THE TIME OF APPLICATION FOR MORTGAGE LOAN
Because you are receiving a mortgage loan from the proceeds of a tax-exempt bond, you are receiving the benefits 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, however, 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 tax.
Upon the closing of your Mortgage Loan, you will be given certain additional information that will be needed to calculate the amount, if any, of the “recapture tax.”
The undersigned mortgagor(s) is (are) aware that they must occupy the subject residence as their principal residence, or will do so within sixty (60) days of the date of the mortgage is executed, and will maintain such property (or unit) as their principal residence and will do so until the loan is paid in full or assumed by a qualifying borrower. The mortgagor(s) is (are) also aware of the Purchase Price Limits and Income Limits as set forth in Schedule II & III of the Supplement to the Mortgage Origination Agreement.
ALL FILES MUST BE CLOSED AND SHIPPED TO THE U.S. BANK HOME MORTGAGE OF BEDFORD, OHIO, THE MASTER SERVICER.
The undersigned mortgagor(s) has (have) received and read a duplicate copy of the foregoing Notice to Mortgagor of Potential Recapture Tax, Principal Residence Requirement, Sales Price and Income Limits, and Final Shipping Dates.
MORTGAGOR: | CO-MORTGAGOR: |
|---|---|
(X) | (X) |
Name: | Name: |
Date: | Date: |
American Dream Downpayment Initiative (ADDI)/HOME Program - Notice to Homebuyer.
AMERICAN DREAM DOWNPAYMENT INITIATIVE (ADDI)/HOME PROGRAM
Notice to Homebuyer
You have submitted an application for a first-time homebuyer assistance forgivable loan funded by the Arkansas Development Finance Authority (ADFA) with the American Dream Downpayment Initiative (“ADDI”)/HOME Investment Partnerships Program funds (“HOME Funds”).
If assistance to buy a home is provided, there will be special conditions in your agreement with ADFA and in the mortgage securing the loan. These conditions are required by federal HOME Investment Partnerships Program (“HOME Program”) regulations. We want to make sure you know about them and have them explained to you. They are as follows:
• Qualified borrower(s)' household income cannot exceed 80% of Area Median Income by county adjusted for the number of persons in the household (See attached ADDI - EXHIBIT “A”)
• The borrower(s) must be a FIRST TIME homebuyer in both TARGETED and NON-TARGETED COUNTIES.
• The borrower (s) must attend an 8-hour ADFA - Approved Homebuyer Counseling Class.
• HOME Program Regulations require the home to be owner-occupied as the borrower's principal residence during the “Affordability Period”. The Affordability Period is as follows: Under $15,000 - 5 years; $15,000 to $40,000 - 10 years. The downpayment assistance loan will be forgiven in equal annual installments during the Affordability Period.
• If you sell the house during the Affordability Period, ADFA will recapture the amount of HOME Funds that have not been forgiven during the Affordability Period from the net proceeds.
• Borrower(s) are responsible for satisfying all HOME Program regulation requirements during the Affordability Period, including proper maintenance of residence, and payment of all taxes and property insurance. If you do not abide by the terms and conditions of the HOME Program, you will be in default and recapture or foreclosure proceedings may be initiated.
• In order to receive the assistance, you must execute a Promissory Note(s), Subordinate Mortgage(s), Subordinate Mortgage Assignment and Homebuyer ADDI Downpayment Assistance Agreement. The ADDI Subordinate Mortgage will constitute a second lien, and any subordinate mortgage for rehabilitation, if applicable, will constitute a third lien.
• ADFA inspectors will perform Housing Quality Standard (HQS) Inspections on all homes. This is not intended to replace a home inspection by a state licensed home inspector. If the home is pre-1978, ADFA inspectors will perform a Lead-Based Paint Risk Assessment Inspection to determine if paint hazards are present. This must be addressed prior to closing the loan. There is no charge to the borrower(s) for these inspections. The ADDI Subordinate Mortgage will constitute a second lien, and any subordinate mortgage for rehabilitation (if applicable) will constitute a third lien.
By signing below, you understand each of the foregoing conditions and affirm that they have been fully explained to you.
Borrower | Date |
Borrower | Date |
Lender | Date |
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 109.03.5 Exhibit 5-F, AR ADC 109.03.5 Exhibit 5-F
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