Posted by Stacy (AZ) on January 26, 2004 at 14:50:53:
I spoke to the seller, and it turns out only 4% of the purchase price was originally financed using govt. assistance (bond money). This was her downpayment ($4,300). So, I wonder how this affects my deal?
Anyone?
Oops! Tax Exempt Financing Rider? - Posted by Stacy (AZ)
Posted by Stacy (AZ) on January 26, 2004 at 14:36:49:
I am negotiating for taking a property Subject-to, and in looking over the seller’s trust deed, I found a TAX EXEMPT FINANCING RIDER. I’ve never seen this before, and I think it spells trouble.
The rider refers to the tax exempt status of the loan, and the fact that the lender can call the loan due if the property is sold, or an interest in the property is transferred, to a person who does not comply according to IRS tax code section 143. I guess the seller originally bought the property using government assistance.
Does this spell disaster for my idea of taking over the loan subject-to? Will I end up getting the loan called if they find out? Will I have to pay recaptured tax when I sell it in a few years?