Two Excel Tools That Help Answer Key Single Family Revenue Bond Subsidy Recapture Questions.

I have created a new Excel workbook HERE that has two tools that help answer key single family revenue bond / mortgage credit certificate subsidy recapture questions (in all states, not just in Oregon).

1. Is future income in years after purchase low enough so that subsidy recapture is not an issue?
2. Is there an automated format I can use to input and calculate the information required to complete the relevant IRS form?

The first worksheet requires only three inputs. 

1. Maximum permissible income (for family size and location) at time of purchase.
2. Borrowers income at time of purchase (as used for qualifying purposes)
3. Borrower income in the year home was sold. 

Once those inputs are made the worksheet estimates, for nine individual years, what the permissible income is before subsidy recapture may be an issue. (The worksheet assumes family size has not changed). The bottom of the worksheet includes links to OHCS income limits and a PDF of IRS form 8828 and related instructions. 

The second worksheet is the automated version of IRS Form 8828, Recapture of Federal Mortgage Subsidy.

Even if subsidy recapture is not required revenue bond/mortgage credit certificate homebuyers are required to file a IRS form in the year they sell the home.

Surprisingly, while there are PDF fillable versions of that form there are no Excel versions of the form that I have been able to find and I discovered that even TurboTax does not include an automated version of the form.

The worksheet takes multiple user inputs and calculates these line items on the form

Years and months from time of closing to sale [Line 7].

Amount realized from sale [Line 11].

Gain realized from sale [Line13].

Whether actual income is below or above permissible income at time of sale.[Line 17].

Federally subsidized amount [Line 19].

Recapture amount [Line 22].

Tax [Line 23].

At the bottom of the this worksheet there are links to the IRS posted PDF version of the form as well as relevant IRS instructions.

Both worksheets are copy protected to prevent inadvertent entries.

CAVEAT: BOTH WORKSHEETS ARE FOR ILLUSTRATION ONLY and should not be used for formal loan underwriting or tax preparation. They do not represent OFFICIAL documents and the calculations are MY estimates ONLY. 

Originally created and posted on the Oregon Housing Blog.