Housing Academy

Join us and learn about the process of buying a home in the state of Washington! 

You don't know what you don't know! Learning the correct steps to purchasing a home in the state of Washington has never been more crucial.  Especially with ever evolving lending guidelines, loan options, tax credits and real estate laws.  

In our five hour homebuyer class you will learn all the important steps to become a successful homeowner. We discuss popular and beneficial downpayment programs such as HomeAdvantage Rebound, House Key Plus, and HomeChoice. We also dive into the world of real estate marketing and the methods used by industry professionals to gain the upper-hand on first time homebuyers. We promise you that when you leave our class you will have the confidence and knowledge to become a successful homeowner. 

Washington Housing Association offers live classes all around the puget sound area.  Online courses are also available for those with hectic schedules.  Don't purchase a home until you have attended a Washington Housing Association homebuyer class.  

Our class is designed to answer all your home buying questions and take you inside the world of financing. Some of our students just want to know more about the process of buying a home.  Some students are sick and tired of renting, and some just don't know who to trust for the information.  What ever the reasons are, you will be glad that you attended our award winning class.  We take the mystery out of the home buying process. 

Register today  or call us at 425-390-INFO.
The payment of the recapture tax is due at the time the property is sold and only if all three conditions apply to your circumstance. 

If your home is financed using the House Key State Bond program, or if you utilized the Mortgage Credit Certificate and you sell your home within nine years of your purchase, then you may be subject to the recapture tax. It is our understanding that very few borrowers will be subject to this recapture tax as long as they follow specific guidelines.  Washington Housing Association discusses the recapture tax in our educational home buyer seminar.  A participating loan officer should provide you with a statement regarding recapture tax.  They will also provide you the federal income limits.

In the event a borrower meets all three conditions mentioned above, it will only be a percentage of the borrowers gain on the sale of their home.  The maximum recapture tax will be either 50% of the gain on the sale or 6.25% of the original loan amount, whichever is less.  We do advise you to contact the IRS or a tax professional to calculate this provision. 

There are income limits that are set by the statute each year and annually adjusted 5% after the closing on your home. To find out how these income limits will affect you, there are three pieces of information you will need:

  • your household size at the time the home is sold or disposed,
  • the year that you purchased your home, 
  • and whether or not your home is in a Targeted Area.

For Recapture Tax limits effective for the loans closed on or after the year 2000 you can contact us at askus@washingtonhousingassociation.org.  We can provide you the recapture tax limits for those specific years. 

Very few borrowers will owe Recapture Tax.  If you think that you may owe this tax, you can calculate the tax owed only after the sale of your home.  The maximum recapture tax is 6.25% of your original principal balance of the loan or 50% of the gain of the sale of your home; whichever is less.  The date of the sale or transfer, your specific income in relation to the Adjusted Qualifying Income in the year of the sale or transfer, and the gain from your sale or transfer determine how much the recapture tax will be.  

There are some advantages to selling your home in the latter part of the nine year recapture period.  For instance, the maximum recapture amount increases during the first five years to it's maximum in the fifth year.  The tax amount decreases 20% per year through the ninth year.  Remember, if the sale or transfer of your home occurs after the ninth year, then there is no Recapture Tax.  

If the loan is assumed then the Recapture Tax is still applicable.  For instance, if the sale or transfer occurs within the first nine years of owning the home, then the original borrower pays the recapture tax (if applicable).  A new nine-year cycle begins with the a new recapture tax if they also receive a MCC. 

If the borrower dies within the nine-year period then no recapture tax is due.  In addition, a divorce settlement is not a sale or transfer for the purposes of recapture.  Whichever party receives the home in the divorce settlement pays any recapture tax that may be due as a result of the sale or transfer if within the nine-year period. 

No recapture tax is due at the time of refinancing your home.  However, if you sell or transfer the property within the first nine-years you may owe recapture tax. Just how a refinance or repayment of the loan in full affects the recapture tax depends on when the refinancing or repayment occurs.  If the borrower chooses to refinance or repay the loan in full within four-years of the closing date of the loan and sells the home at a later date during the nine-year recapture tax period, the "holding Period Percentage" used in determining the recapture tax is calculated in the manner set forth by the IRS.  

​For instructions on how to calculate recapture tax use IRS Form 8828 and Instructions on the IRS website.

Federal Recapture Tax Information


Three ways that make you subject to the recapture tax:

     If you sell your home within the first 9 years, you might pay this tax.

     If you sell your home with gain, you may pay this tax.

     If your household income for the year in which you sell your home exceeds      the federal recapture tax limits, you might pay this tax.