What are the main features of recapture and resale?

Date Published: October 2012

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Resale requirements must ensure that for the duration of the affordability period the housing is subsequently purchased only by a buyer who is income eligible to receive NSP funds, and who will use the property as principal residence. The resale requirement must also ensure that the price at resale provides the original NSP-assisted owner a fair return on investment (including the homeowner's investment and any capital improvement) and ensure that the housing will remain affordable to NSP eligible buyers.  

Recapture provisions must ensure that the grantee recoups all or a portion of the NSP assistance to the homebuyers if the housing is sold during the period of affordability. The recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit. The amount recaptured cannot exceed the net proceeds, if any. The net proceeds are the sales price minus superior loan repayment (other than NSP funds) and any closing costs. The grantee has various options to consider in determining the amount recaptured, which can be accessed at 24 CFR Part 92.254 for more detail. The recapture approach must be stipulated in the grantee's agreement with the homebuyer.  

The HOME Resale and Recapture chart developed by HUD summarizes the resale and recapture options.


Tags: NSP Program Requirements - Resale/Recapture

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