FEDERAL SUBSIDY RECAPTURE

The Federal subsidy recapture is the repayment of all or part of a federal mortgage subsidy if the home is sold or otherwise disposed of within nine years of receiving a federally-subsidized loan. If a home is financed using a federally-subsidized program, all or part of the benefit received from the program may need to be repaid (recaptured) by increasing the federal income tax for the year of the sale.