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Updated over 1 year ago on . Most recent reply

Connecticut Mortgage Loans CHFA
Hello Everyone! Looking for some help understanding all the tax implications of a CHFA loan. There is an IRS tax recapture if 3 things happen:
1. I sell within 9 years
2. Make over a certain salary at time of sale
3. Profit a certain amount when I sell.
I am currently going through the process of obtaining a CHFA loan and I am worried about the above 3 rules. Anyone have any info on the limits/how to calculate? I called CHFA and they could not give me any specifics. I also found some info online but am have trouble doing calculations on my own. Any help is much appreciated!
Most Popular Reply

- What are the benefits for YOU using the CHFA product? (Besides low interest rates, low income, etc.)
- What is your plan with the property?
- How many years do you have to live there? And can you rent it out after? (I remember them being strict on the guidelines, but I have personally not used them so I don't remember)
- Are you buying an investment property?
The reason I ask about:
- Benefits: I want to make sure you are using the best loan product for your current situation. There are many products that may be better and I don't want you to pick one that doesn't fit your needs. (FHA, 10% Conventional, USDA, VA if you're military, etc.)
- Plan with the property: I want to know your long term vision, I would assume you plan to hold for at least 9 years, otherwise there are the tax implications. (Sorry I don't know about calculating the tax implications)
- Can you rent: I ask this because your situation may change and you might want to move, if there is a clause in the contract that you cannot rent, you will be forced to sell with a result in tax recapture.
- Are you buying right: I ask because just in case you get "stuck" by losing a job or some life experience happens, will you be able to cover the mortgage payment by yourself? (Hinting house hack. Or maybe it is a single family with roommates, etc.)
I always have red flag questions when you have someone telling you what to do with your property. Having exit strategies and investing wisely (House Hack) will put you in a better position financially, and that is why we are all here on BP.