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Refinancing an MPDU During the Control Period

Owners of MPDUs during the MPDU control period are allowed to refinance their homes, or to take out a home equity loan. However, MPDU owners must NOT refinance their MPDU for more than the current MPDU resale value of the property. 

In order to refinance your MPDU, you must complete the following steps:

  1. Choose a lender; you may, but do not have to use an HOC approved lender
  2. Advise your lender that your unit is part of the MPDU Program;
  3. Send a Refinance and Resale Price Request Form to the MPDU office by email to MPDU Intake requesting the current MPDU resale value of your unit, stating your reason for requesting the value (is it for a refinancing or for a home equity loan). Include a list of allowable capital improvements made to the unit, as well as copies of the receipts for work performed.  (DHCA will need 21 days to respond to your request, so plan accordingly).  The MPDU office will send you a letter with the current MPDU resale value of your unit.
  4. Send the letter you received from the MPDU Office to your lender.
  5. Your lender or title company must send a copy of the new recorded Deed of Trust and a copy of the HUD-1 Settlement Statement to the MPDU office no later than two weeks after recordation.

Following these steps will ensure that you receive your information in a timely manner. The MPDU office cannot honor “last minute” requests for MPDU values. These requests should be made at the beginning of the loan process, not when the loan is ready to close.

An MPDU does not have a “market value" until the controls have expired on the unit.  Therefore, an owner must inform their lender that the unit is part of the Moderately Priced Dwelling Unit program. The MPDU resale value is essentially the original sales price of the MPDU, plus inflation and an allowance for improvements made to the unit.

Please be aware that due to the resale price limit on the MPDU during the control period, as well as the shared profit requirement after the controls have expired, an owner who refinances for an amount in excess of the MPDU value will be in jeopardy of owing more money than they will be able to receive if the unit is sold.

Failing to adhere to these rules will place you in financial and legal jeopardy because:

  • Montgomery County will not make special exceptions for MPDU owners who do not follow these rules.
  • Montgomery County will not waive the MPDU resale price, or the amount of shared profit owed to the County.
  • The County will pursue legal action against MPDU owners who knowingly or unknowingly violate these restrictions.

There is a "Notice of Sale and Refinance" recorded on your MPDU in the land records of Montgomery County.  This Notice is updated by the MPDU Office after you refinance or obtain a home equity loan.  

Thank you for your cooperation in this process.

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