FAQ

No. SONYMA requires that all mortgage loans with a downpayment of less than 20% be covered by PMI insurance. SONYMA does not permit PMI to be eliminated based on a subsequent increase in the property's appraised value. However, SONYMA does require that the company servicing your mortgage cancel PMI coverage once the current unpaid principal balance is reduced to 80% of the original value of the property. In addition, the PMI must be cancelled when your mortgage reaches the midpoint of its original term (for example, the 181st month of a 360-month term mortgage), regardless of whether the balance has been reduced to 80% of the original value of the property. Under no circumstance, however, will PMI be eliminated if you are currently behind in making your mortgage payments. If you have additional questions regarding PMI, please contact your mortgage servicer for more information.

No. SONYMA requires that an escrow account be maintained for all mortgage loans until the loan is paid in full.

SONYMA's first time homeowner mortgages are often funded through the issuance of tax free mortgage revenue bonds. By using our programs, borrowers are receiving the benefit of a lower interest rate than the private market offers. This benefit is "recaptured" in certain instances through higher Federal income taxes in the year you sell or otherwise dispose of your home.  For more information, see the IRS's website at http://www.irs.gov/instructions/i8828/ch01.html

You are required to pay Federal recapture tax if all of the following three conditions apply:

• You sell or otherwise dispose of your home within the first nine years;
• You make a net profit on the sale; and
• In the year you sell your home, your household income increased more than the IRS pre-established amount.

When you purchase your home, your lender and SONYMA will provide you with sample worksheets, which will include how much your household income would have to exceed for you to incur any recapture tax liability. If you sell or otherwise dispose of your home within 9 years, you must complete IRS Form 8828 ("Recapture of Federal Mortgage Subsidy") to determine if you owe the Federal recapture tax. To download IRS Form 8828, click here. To download the Instructions to Form 8828, click here.

No. You are still responsible for accurately paying any and all taxes to the IRS. SONYMA will reimburse you for the actual amount of the Federal recapture tax you owe and paid that is not covered by mortgage insurance.

It's simple: 

• Fill out the SONYMA's "Request for Recapture Tax Reimbursement" form and provide a signed copy of your Federal tax return, including completed IRS Form 8828, which has been filed showing payment of the Federal recapture tax.
• Proof those taxes have been paid, such as a copy of a cancelled check or bank statement (if any tax was owed the IRS).
• A completed and signed IRS Form 4506-T, Request for Transcript of Tax Return. 
• A copy of your HUD-1 Settlement Statement showing the sale of your home.

Forms to apply for reimbursement for applying for reimbursement are linked above.

To be eligible for SONYMA reimbursement for any Federal recapture tax you paid, the following must apply: 

• Your loan was financed with SONYMA's qualified mortgage revenue bonds and closed on or after July 17, 2007, or if you recieved a Mortgage Credit Certificate and

• You submit to SONYMA the "Request for Recapture Tax Reimbursement" form, together with the supporting documentation.

You must submit the request for reimbursement no later than December 31st of the year the Federal Recapture Tax is owed and paid. For example, if you home is sold in 2007, the tax return is filed in 2008. The request for reimbursement must be submitted no later than December 31, 2008.

Yes - if you close on your SONYMA mortgage on or after July 17, 2007. SONYMA will reimburse you for any portion of the recapture tax that is not covered by insurance.