What is recapture tax on down payment assistance?
Recapture is a federal provision that can apply when a home bought with mortgage-revenue-bond financing is sold within nine years, and 249 of the 2,700-plus programs in the catalog carry a recapture provision.
It applies only where all three conditions are met at sale — the sale happens within nine years, the home sells at a gain, and the seller’s income has risen above a published threshold. Many state agencies reimburse borrowers who do owe it. Recapture is a tax matter, and a tax professional is the right person to ask about any particular situation.
State by state
46 states and territories have at least one. Each links to that state's full directory.
| State | Programs with a recapture provision |
|---|---|
| Maryland | 26 |
| Virginia | 22 |
| New York | 16 |
| Massachusetts | 15 |
| Connecticut | 14 |
| Illinois | 10 |
| Pennsylvania | 8 |
| California | 7 |
| South Carolina | 7 |
| Louisiana | 6 |
| Minnesota | 6 |
| New Hampshire | 6 |
| Ohio | 6 |
| Arizona | 5 |
| Georgia | 5 |
| Montana | 5 |
| North Dakota | 5 |
| Oklahoma | 5 |
| Wyoming | 5 |
| Idaho | 4 |
| Indiana | 4 |
| Maine | 4 |
| Nebraska | 4 |
| Texas | 4 |
| Washington | 4 |
| Alaska | 3 |
| Arkansas | 3 |
| Delaware | 3 |
| Kentucky | 3 |
| New Jersey | 3 |
| Tennessee | 3 |
| Vermont | 3 |
| Alabama | 2 |
| Colorado | 2 |
| Hawaii | 2 |
| Iowa | 2 |
| Michigan | 2 |
| Mississippi | 2 |
| New Mexico | 2 |
| Nevada | 2 |
| South Dakota | 2 |
| Utah | 2 |
| West Virginia | 2 |
| Kansas | 1 |
| Missouri | 1 |
| North Carolina | 1 |
Questions, answered
What is recapture tax on down payment assistance?
Recapture is a federal provision that can apply when a home bought with mortgage-revenue-bond financing is sold within nine years, and 249 of the 2,700-plus programs in the catalog carry a recapture provision. It applies only where all three conditions are met at sale — the sale happens within nine years, the home sells at a gain, and the seller’s income has risen above a published threshold. Many state agencies reimburse borrowers who do owe it. Recapture is a tax matter, and a tax professional is the right person to ask about any particular situation.
Where do these numbers come from?
Hey Prescott maintains a catalog of active down payment assistance programs across all 50 states and DC, each verified against the administering agency's own published material and carrying the date it was last checked. The counts on this page are drawn from that catalog and refresh as it does.
Is Hey Prescott a lender?
No. Hey Prescott is an educational directory of down payment assistance programs. We list programs and link to official sources; we do not make loans or give individualized lending advice.
More questions
- Do you have to pay back down payment assistance?
- Do you have to be a first-time buyer to get down payment assistance?
- Can you combine down payment assistance programs?
- Do you need a homebuyer education class for down payment assistance?
- What credit score do you need for down payment assistance?
- Can you use down payment assistance on a manufactured home?
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