RHODE ISLAND HOUSING AND MORTGAGE FINANCE CORPORATION
MORTGAGE PURCHASE PROGRAM
RECAPTURE NOTIFICATION AND MORTGAGOR'S AFFIDAVIT
(TO BE COMPLETED AND EXECUTED BY ALL BORROWERS
AT LOAN APPLICATION AND AGAIN AT CLOSING)
PART 1 - RECAPTURE NOTIFICATION
You have applied to Rhode Island Housing and Mortgage Finance Corporation ("Rhode Island Housing") for a loan to be
financed with the proceeds of tax-exempt funds. You are hereby notified that current federal tax laws will require a payment to
the federal
government of any "recapture" amount upon sale, transfer, or other disposition of your home. You will be
required to pay a recapture tax equal to a portion of the loan amount if you sell or otherwise transfer your home to someone
else within the first 9 years of your mortgage loan. The recapture tax may not exceed, the lesser of 6.25% of the highest
principal amount of your mortgage loan or, 50% of the gain realized on sale, transfer, or other disposition. You may not have
to pay part or all of the recapture amount if your income at the time of sale, transfer, or other disposition, is less than a
prescribed amount, or if the sale, transfer, or disposition arises as a result of your death.
There is no way to predict your exact tax liability since it is based on when you sell or transfer your home, your gain from the
disposition, and income and family size at the time of disposition. Moreover, because the U.S. Congress may at any time
enact legislation amending the current federal law, the requirement (if any) affecting your mortgage loan at the time of closing
may be different from the described above. You will be given a final notice concerning this recapture tax either at the closing
of your mortgage loan or within a short time thereafter. Consult your tax adviser or local IRS office for further information.
Attachment 1 - No Preference Affidavit
RIH Form 06
Rev. 6/2017
Borrower(s):
Date
of Application:
Address
of Home Being Purchased:
Lender:
Lender
Loan Number:
2
PART II - MORTGAGOR'S AFFIDAVIT
The undersigned Borrowers, as applicants for a home mortgage originated pursuant to the Homeownership Opportunity Programs of
the Rhode Island and Mortgage Finance Corporation, being duly sworn, do hereby represent and warrant as follows:
1.
The home to be financed with proceeds of the home mortgage is located within the State of Rhode Island at the address
shown above.
2.
Either:
(a)
The home is or upon completion of construction thereof will be reasonably suitable for occupancy by not more than
one family; or
(b)
The home is designed for occupancy by two, three or four families, was first occupied as a residence more than five
years before the date of execution of the mortgage and (I/We) intend to and will occupy one unit; or
(c)
The home is a new two family home in a targeted area and (my/our) household income does not exceed applicable
income limits.
3.
(I/We) intend to and shall occupy the home as (my/our) principal place of residence within sixty days after the closing of the
home mortgage, or, in the case of a loan made to finance the construction of a home, within sixty days after the completion of
the construction, and thereafter to maintain the property as (my/our) principal residence until the home mortgage is paid and
the note securing the same is discharged.
4.
Except in the case of the rental of units in a two, three or four unit home, (I/We) will not use the home in a trade or business
which qualifies (me/us) to deduct any portion of the cost of the home as home business expense on (my/our) Federal or State
income tax return(s), and (I/We) in any event will not use more than 15% of the total area of the home primarily in a trade or
business.
5.
(I/We) will not use the home as investment property and will not receive any income from the home or land being purchased
with the home except incidentally as follows:
6.
(I/We) will not use the home as a recreational home.
7.
All of the land being purchased with the home reasonably maintains the basic livability of the home, and (I/We) have no
intention of subdividing such land or otherwise selling it apart from the home
8.
a. (I/We), including my spouse, have not had a present ownership interest in a principal residence, *including a mobile home
or factory-made housing permanently fixed to real property, at any time during the three-year period immediately prior to the
closing of the home mortgage.
Following is a list of all the residences in which (I/We) have lived either separately or together during the three-year period
immediately prior to the closing of the home mortgage and the names and addresses of the owners thereof:
Address of
Residence
Dates
Reside There
Name and Address
of Owner of Residence
Following is a list of all the real property which (I/We) have owned either jointly or severally during such three-year period:
Address
of Property
Dates
Owned
Description
of Property
Use of Property during such
3 Year Period
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8. b. (I/We) have provided copies of (my/our) federal income tax returns, as signed and filed, on Form 1040 for any years during
such three-year period that such returns were filed with the Internal Revenue Service. If (I/We) do not have such copies of such
returns as signed and filed, (I/We) have, by completing and executing the proper Request(s) for Disclosure of Tax Returns,
authorized the originating lender to obtain copies of such returns from the Internal Revenue Service. If (I/We) (was/were) not
required to file such returns during one or more such preceding three years in accordance with Section 6012 of the Internal
Revenue Code, (I/We) are familiar with such Section 6012 and confirm that such returns were not required to be filed for the
following years:
8.
c. With respect to the transfer of ownership of the home:
(i)
(ii)
(iii)
(iv)
(v)
(I/We) have attached a copy of the purchase contract, together with all other agreements which (I/We) have entered
into with the seller of the home, to this Affidavit.
(I/We) have completed Part III of this Affidavit and (I/we) hereby certify the information therein to be true, accurate
and complete.
Neither (I/We) nor anyone on (my/our) behalf has made any payment other than the amount shown in (i) to the seller
of the home or to any other person on behalf of the seller, nor have (I/We) cancelled any debt of the seller or any
related person to the seller.
(I/We) have not entered into any agreement with the seller of the home, the developer, the contractor, or any other
person pursuant to which any portion of the home has been left unfinished or any fixtures or other architectural
appointments have been omitted or removed from the home in order to reduce the acquisition cost.
If the residence is located on leased land, a copy of the lease has been provided to the originating lender.
*
The term "present ownership interest" includes not only outright (fee simple) ownership but also any of the following
interests if held
either directly by you or in trust for you: a joint tenancy, a tenancy in common, a tenancy by the entirety,
a community
property interest, the interest of a tenant-shareholder in a cooperative, a life estate, or a contract pursuant to which you
have possession and the benefits and burdens of ownership although legal title is not transferred until some time later. A
"principal residence" does not include a vacation home or time sharing residence which is not used as a permanent
residence or a mobile home which is located on land which is leased for less than two years.
*
[Skip Question 9 if a Qualified Rehabilitation Loan exemption is applicable.]
9.
(I/We) will not use any part of the loan proceeds to acquire or replace an existing mortgage except for the construction period
financing or other temporary initial financing as follows:
Amount of
Loan Proceeds
Type, Purpose and Terms of Existing
Mortgage Being Acquired or Replaced
10.(I/We) have not purchased the home for purposes of resale and will not allow the mortgage on the home to be assumed, nor
sell the home subject to the mortgage unless the applicable compliance requirements pursuant to Section 143 of the Internal
Revenue Code have been satisfied and the Corporation has provided written permission.
11.
[Answer Question 11 only for a rehabilitation loan or loan for a newly constructed home.]
(a)
(I/We) are the first resident(s) of the home after the completion of the construction or rehabilitation.
12.
(My/Our) current income does not exceed $ [RIHMFC Income Limit). (Actual eligibility determination will be
made by reference to gross income as computed in Part IV of this affidavit.)
13.
(I/We) understand that any employee of the Corporation or any Participating Lender in the Corporation's First Homes
Program, and any spouse or immediate relative (i.e. parent, sibling or child) of such employee or spouse, must
complete
a No Preference Affidavit. (Attachment 1)
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PART III - ACQUISITION COST OF THE RESIDENCE
The acquisition cost of the land and dwelling is computed as follows:
1.
Amount paid, in cash or by check, draft or other instrument, or the value of any
property transferred of any other kind, by the Purchaser(s) to or for the benefit
of the Seller(s) for the land and dwelling (see Note 1 below) (including a real
estate broker's commission of % or $ )
2.
Amount paid, in cash or by check, draft or other instrument, or the value of any
property transferred of any other kind, by any other person to or for the benefit
of the Seller(s) for the land and dwelling (See Note 2 below)
3.
Amount paid to the Seller for fixtures such as light fixtures, curtain rods and
wall-to-wall carpeting unless the amount paid for fixtures is part of the cost of
the land and dwelling including in 1 or 2 above (See Note 3 below) . . . . . . . . .
4.
Amounts, if any, not included in 1, 2, 3 or 7, and paid to others for items which
are standard fixtures including refrigerator, stove, dishwasher, washer, dryer
and bathroom fixtures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.
If the dwelling was under construction or rehabilitation, incomplete or unfinished
at the time the property was acquired by Purchaser, a Schedule of Completion
Cost (Form # 11) must be completed. Amount of "Total Project Cost of
Completion" from Schedule of Completion Costs which are not to be paid to the
Seller(s) in 1, 2, 3 or 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
If the dwelling is leased or subject to a ground rent, the capitalized value of the
lease payments or ground rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.
Amounts paid for any purpose by Purchaser(s) on behalf of the Seller(s) for any
lien or assessment to which the property is subject Nature of Payment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.
Settlement or financing costs in excess of the usual and reasonable costs (See
Note 4 below) (specify). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9. Total Acquisition Cost……………………………………………………...
$
Note: The acquisition cost of a Residence does not include the following:
(1)
The cost of land (regardless of the appraised value of such land) which has been owned by the Purchaser(s) or members of
the Purchaser(s) immediate family for at least two years before the date on which the construction of the structure comprising
the Residence begins.
(2)
The imputed value of services performed by the Purchaser(s) or members of his or her family (which include only the
Purchaser's
grandparents, parents, children, brothers and sisters, spouse or other ancestors and lineal
descendants in
constructing or completing the residence, or
(3)
The cost of personal property sold with the premises which is separately indentified in the contract, valued at its fair market
value and not financed by the Qualified Mortgage.
(4)
Usual and reasonable settlement and financing costs: "settlement costs" include titling and transfer costs, title insurance,
survey fees and other similar costs, and "financing costs" include credit reference fees, legal fees, appraisal expenses, points
which are paid by the Purchaser(s), or other costs of financing the residence. Such amounts must not exceed the usual and
reasonable costs which otherwise would be paid, if the loan were not being financed with the proceeds of tax-exempt bonds.
5
PART IV - INCOME ELIGIBILITY
The financial information requested in this Part IV must be provided by the borrower(s) at time of application. The Lender will
calculate the income based on the receipt of verifications. Any changes to the income after lender verification will be made at
the closing.
For purposes of compliance under the Program income limits, all income from the borrower's spouse, any person(s) having and
ownership interest in the subject property and any adult(s) (over 18) who will be occupying the subject property must be
included.
The information requested below must be provided in order to determine eligibility under the Program's income limits. The limits
are used solely to determine eligibility under the Program's income limit provisions and will not be used for mortgage loan
underwriting purposes.
To determine additional income which is ordinarily received periodically other than monthly, add the total amount received
during the preceding 12 months and divide by 12.
EACH LINE MUST BE COMPLETED WITH EITHER A DOLLAR AMOUNT OR A ZERO
AT APPLICATION
VERIFIED
CLOSING
to be completed only if
verified figures have changed
Borrower Co-Borrower Borrower Co-Borrower Borrower
Co-Borrower
A.
MONTHLY EMPLOYMENT INCOME
Base Pay:
Overtime:
Bonus:
B.
OTHER INCOME
Part-time employment:
Child Support:
Alimony:
Unemployment Compensation:
Social Security/Disability:
VA Compensation:
Pension/Estate/Trust Income:
Tips:
Public Assistance:
Net Rental Income:
Interest/Dividends:
Royalties
:
Other Income:
C.
SELF EMPLOYEMNT INCOME
Schedule C, F, or E from 1040
Add Depreciation
D.
Gross Monthly Income $_________ $_________ $_________ $_________ $__________ $_________
E.
Gross Monthly Income
Non Purchasing Spouse $_________ $_________ $_________ $_________ $__________ $_________
F.
Annual Gross Income (total
of line "C" multiplied by 12) $
$
$
Note to Borrowers: If Total Annual Gross Income is above the applicable limit at EITHER time of the loan application, lender
verification or at title closing, the Borrower(s) will not be eligible for a mortgage loan.
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PART V - CERTIFICATION
(I/We) have read the Recapture Notification as set forth in Part 1 hereof, and understand that (I/We) may be required to pay a
recapture tax to the United States Treasury as a result of receiving (my/our) mortgage loan from the proceeds of a tax-exempt
bond.
(I/We) understand that, if (I/We) have made any material misstatement in the foregoing representations or omitted to state
any of the information requested, the following may occur:
1)
(I/We) will be fined not more than $1,000,000 or imprisoned not more than thirty years, or both, pursuant to Section
1014 of
Title 18 of the United States Code.
2)
The office of Attorney General will be contacted for investigation regarding perjury, misrepresentation and fraud.
3)
The outstanding principal balance of the loan will be immediately due and payable together with accrued interest and
foreclosing costs (if foreclosure is necessary because payment in full is not made immediately).
4)
(I/We) have read and understand the following provisions of Chapter 33 of Title 11 of the Rhode Island General
Laws:
11-33-1.
11-33-2.
Perjury - (a) Every person under oath or affirmation who knowingly makes any false material declaration or
makes or uses any other information, including any book, paper, document, record, recording, or other material,
knowing the same to contain any false material declaration, shall be deemed guilty of perjury…..
Penalty for Perjury - Every person who shall be guilty of perjury or of subornation of perjury, by procuring
another to commit perjury, shall be imprisoned not exceeding twenty (20) years.
(I/We) declare under penalty of perjury that the foregoing warranties and representations are true and correct.
Date
Date
Subscribed and sworn to before me this
day of , 20
.
Signature (Name: )
Signature (Name: )
(PRINT NAME):
Notary
Public
My Commission Expires
INTERVIEWER'S CERTIFICATION
I have explained the contents of the Affidavit to each of the Borrowers whose signature appears above, and I have no reason
to believe that those individuals made any misstatements in the warranties and representations required to be made herein or
omitted to state any of the information requested.
By:
Participating
Lender
Date
Name:
Title:
CLOSING ATTORNEY'S CERTIFICATE
I have discussed the contents with the above signed Borrower(s) and have no reason to believe that there is any
misstatement or omission therein and the Borrower(s) represented to me that its contents were understood.
PART VI - REAFFIRMATION AT TITLE CLOSING
Closing Attorney
(I/We) as Purchaser(s) of the Residence indicated herein reviewed all of the foregoing representations and warranties made
by (me/us) as of this day of , 20 (the title closing date).
(I/We) do hereby reaffirm all of the foregoing representations and warranties previously made.
Purchaser
Purchaser
7
PART VII - BORROWER COUNSELING PROGRAM DISCLOSURE
In the event that payments due on your mortgage are not made (become delinquent) as specified in your mortgage note, ,
(Lender) will initiate certain actions to inform you of your payment responsibilities through the following methods:
.
Notification to the Borrower of an overdue payment within 15-18 days of such overdue payment and that a late charge has
been incurred;
.
Attempts to contact the Borrower by telephone prior to the 30th day of delinquency in order to determine the reasons for
the delinquency and discuss relief provisions;
.
Attempts to obtain face-to-face contact with the Borrower prior to the 60th day of delinquency in order to discuss the
delinquency;
(I/We) undersigned hereby acknowledge the availability of a program addressing delinquency counseling as described above.
The availability of a counseling program does not relieve me(us) of the responsibilities for making timely payments as specified
in my(our) mortgage note, nor does it limit the collection activities that the Lender may take in enforcing the terms of the
mortgage note.
Borrower
Borrower
Date
Date
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART VIII - BORROWER ACKNOWLEDGMENT OF HOMEBUYER EDUCATION
I certify that I have successfully completed a homebuyer education program and understood the following topics:
.
.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IX - BORROWER AUTHORIZATION TO RELEASE INFORMATION FOR CREDIT COUNSELING
If I/We experience difficulty in making my monthly mortgage payment, I/We acknowledge that the servicer of my mortgage loan
may provide me with information regarding counseling programs. If I choose to engage a counseling program to assist me,
then upon my request, my servicer will release certain financial information related to my mortgage loan to the counseling
program. This information may include, but may not be limited to: Original Loan Amount, Payment Due Date, Monthly
Payment Amount, Current Balance, Payment History, Amount Past Due.
Borrower
Date
Borrower
Date
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART X - AUTHORIZATION FOR USE OF IRS FORM 4506-T
Rhode Island Housing requires the IRS Form 4506-T to be signed by Borrowers at closing. This form permits Rhode Island
Housing to request copies of your tax returns directly from the Internal Revenue Service.
In the event that your loan is randomly selected for an audit, this form will be used to compare the IRS records to the
information submitted by you for your mortgage approval.
By signing this disclosure, you acknowledge your understanding of this requirement and authorize our auditors to obtain copies
of your tax returns.
Borrower
Date
Borrower
Date
Ratios and Pre-qualification
.
Credit Report
.
Closing Costs
.
Downpayment
Budgeting
.
PITI
.
Appraisals
.
Property Maintenance
8
Attachment 1
NO-PREFERENCE AFFIDAVIT
STATE OF RHODE ISLAND
COUNTY OF
}
ss.:
I
, being duly sworn, state that I have not received any preferential
treatment in connection with my application for, the processing of and my receipt on the date hereof of a mortgage loan with
respect to property at:
IN WITNESS WHEREOF, I have hereunto set my hand this day of , 20 .
Witness
Borrower
Co-Borrower
NO-PREFERENCE AFFIDAVIT
On behalf of the Participating Lender listed below, the undersigned certifies that the above no preference affidavit is true and
correct.
By
Witness
Name
Title
For
Participating
Lender
To be completed by any Borrower or Co-Borrower who is an employee or relative of an employee
of a Participating Lender or the Corporation. Lender must complete Lender's Certificate when
Borrower or Co-Borrower or relative is employee of Participating Lender.
