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MPDU Homeownership Program

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Description

Montgomery County's Moderately Priced Dwelling Unit (MPDU) Program offers affordably priced townhomes and condominiums - both new and resale - to first-time homebuyers who have a moderate household income (see list of minimum and maximum income levels below).

When MPDUs are available for sale, DHCA conducts Random Selection Drawings to determine who is eligible to purchase them.  Participants are selected to purchase a home based on a number of factors.

Households must be able to qualify for a mortgage; pay a down payment; pay settlement fees including advance taxes and advance insurance; and pay a monthly mortgage payment, utilities, and other costs.  Special financing and down payment and closing cost assistance are available through the Housing Opportunities Commission.

In addition, MPDU owners are responsible for all home maintenance, home improvements, condo fees (if applicable), and compliance with homeowner or condominium rules and regulations. For new homes, the builder is responsible for all warranty items.

Program Rules

Homes that are purchased through the MPDU Program, whether new or re-sale, have controls on them.  All new MPDUs, and some resale homes have 30 year controls; a very few resale homes have 10 or 15 year controls. These controls are in the form of restrictive covenants that state:

  • During the control period, the owner must occupy the home.  The unit may not be rented out.
  • During the control period, the owner must not refinance the property for more than the controlled resale price established by the MPDU office (owners are prohibited from refinancing the property based on the market value of the property).
  • During the control period, the owner can only sell the home at the MPDU established controlled resale price through the MPDU Program to an approved MPDU purchase program participant.
  • During the control period, MPDU owners must not purchase another property.
  • When the property is sold after the control period, the owner must pay 50% of the excess profit to Montgomery County. For more information see Requesting a Shared Profit Calculation.  
  • After the control period expires, it is strongly recommended that owners contact the MPDU office prior to refinancing their MPDU.  Refinancing does not relieve the owner of the obligation to make a shared profit payment to the County upon sale; therefore, it is important not to refinance for the full market value. The MPDU office can provide you with an estimate of the shared profit payment that would be owed to the County. 

Benefits of MPDU Home Ownership

  • You will get to own a home in Montgomery County at a greatly reduced price.  Living in Montgomery County provides access to high quality services and schools.
  • By purchasing an MPDU home with a standard 30-year fixed rate mortgage, your monthly mortgage payment will not increase each year, unlike rent which landlords typically increase annually.
  • You will be able to deduct mortgage interest and real estate taxes from your income tax.
  • Your property taxes are based on the MPDU value of your property, not a "market value."
  • You have the freedom to make improvements to your home.
  • When you sell your MPDU home during the control period at the MPDU controlled resale price, you will get back what you originally paid for the MPDU, plus inflation and the cost of eligible improvements.
  • When you sell your MPDU home after the control period at a market resale price, you will keep half of the profit.

Are you Eligible?

  1. You are NOT eligible to participate in the MPDU purchase program if you currently own a house or have owned a house anywhere in the past five (5) years.
  2. INCOME Minimums and Maximums (all incomes are gross household income; that is, household income before taxes)
    • minimum annual household income: $35,000
    • maximum annual household income (effective April 14,, 2017):
       
      Eligible Household Size
      and Maximum Income
      Household Size Maximum Income
      1 $54,000
      2 $62,000
      3 $69,500
      4 $77,000
      5 $83,500
      6 $89,500
      7 $95,500
      8 $102,000
  3. Participants in the MPDU purchase program MUST be able to:
    • pay a down payment, settlement fees and other closing costs, and
    • afford the monthly mortgage and other expenses for the property
  4. Financing  Applicants for the MPDU purchase program must provide a mortgage pre-qualification letter from an HOC participating Mortgage Lender in an amount of at least $120,000.  Special financing and down payment and closing cost assistance are also available through the Housing Opportunities Commission (HOC).

How to Apply - Easy as 1...2...3!

Step 1:  Attend First-Time Home-Buyer Class

Step 2:  Attend MPDU Orientation Seminar

Step 3:  Attend MPDU Application Session

NOTE:  You must take the First Time Homebuyer Class before the Orientation Seminar.  You just need to take both of these two classes before signing up for the Application Session.

  • DHCA does not mail applications for the MPDU purchase program. New, first-time participants in the MPDU program need to attend the first two required training sessions (Steps 1 and 2) in order to receive an application to participate in the MPDU program.  They must then attend an Application Session (Step 3) to turn in their completed application.
  • These classes are designed to answer all your questions about the MPDU program, provide information about the home purchase application and selection process, and provide information about home ownership responsibilities.
  • Current participants in the MPDU Program who have already taken the first two classes and who have already received a Certificate of Eligibility do not need to take the first two classes again - however, they must still attend an Application Session (Step 3) to turn in their renewal application and supporting documents.

Note:  Incomplete applications will not be accepted.  Do not sign up for the Application Session until you:

  • attend the First-Time Home-Buyer Class,
  • attend the MPDU Orientation Seminar,
  • obtain a mortgage pre-qualification letter,
  • gather all other documents needed for your application (as identified in your application folder), and
  • complete your application.
Steps and Instructions
Step Instruction
Step 1

Attend a First-Time Home-Buyer Class conducted by Housing and Community Initiatives (HCI).  These home-buyer classes are held in the Council Office Building (COB) an average of three (3) times per month.

Sign up for a First-Time Home-Buyer Class.

Note:  it is important to arrive on time for these sessions.  If you arrive late, you will not be able to attend the class and you will have to reschedule.

After completing this class, you will receive a First-Time Home-Buyer Class Certificate of Completion.

Step 2

Attend an MPDU Orientation Seminar where you will learn about the program benefits, application and selection processes, and program rules.  These MPDU Orientation Seminars are generally held once per month in the Council Office Building (COB).

Click here to sign up for an MPDU Orientation Seminar.

Note:  it is important to arrive on time for these sessions.  If you arrive late, you will not be able to attend the seminar and you will have to reschedule.

After completing this seminar, you will receive the Application folder for the MPDU sales program.

Step 3

The final step in the application process is to attend an MPDU Application Session. The Application Session will last approximately one hour. At the Application Session, your completed application and supporting documents will be reviewed and processed.  These MPDU Application Sessions are held twice a month at 1401 Rockville Pike, 4th Floor.  Parking for the application session is available in the building garage in the basement.  The entrance to the parking is at the right side of the building.  Parking is free after the ticket is validated after the end of the session.

Click here to sign up for an MPDU Application Session.

Note:  it is important to arrive on time for these sessions.  If you arrive late, you will not be able to attend the session and you will have to reschedule.

At the MPDU Application Session, you must provide ALL of the following documentation (applications with incomplete documentation will not be accepted):

  1. The completed MPDU Application form
    (which is given to you upon completion of the MPDU Orientation Seminar)
  2. The First-Time Home-Buyer Class Certificate of Completion form
    (which is given to you upon completion of the First-Time Homebuyer's Class
  3. A mortgage Pre-Qualification Letter
    Your prequalifying letter must be from an approved HOC lender and in the format required or your application will not be accepted.  Please ensure the lender letter you are providing is the original.  Copies will not be accepted.
  4. A copy of your most recent tax return along with W-2 forms
  5. If your taxes do not show your current address and you are seeking a priority point for living in Montgomery County, proof of residency (lease, utility bill, etc.)
  6. Copies of the two most recent pay stubs for each household wage earner
  7. Any other documents required for your application, as indicated in your application folder.

Please ensure that you have made copies of all documents which you need to turn in at the application session.  Montgomery County budget restrictions prohibit the MPDU office from making copies for you.

 

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