MPDU Developers

Guidelines for Unit Types:

A. Encourage a variety of MPDU unit types:

1. Promote, but do not require, duplexes or single-family detached MPDUs in a single-family detached only section of a subdivision.
2. Encourage more than one MPDU unit type in subdivisions with three or more market rate unit types.
3. MPDU unit types and market rate unit types need not be the same.
4. In subdivisions with both single-family and multi-family dwelling units, the ratio of single-family MPDUS to total MPDUS must not be less than the ratio of market-rate single-family units to total market-rate units in the subdivision, unless DHCA approves an alternative in accord with 25A-5(e)(4). Note, townhomes are generally considered single-family dwelling units with the exception of two-over-two / piggyback townhomes. 

B. Develop a Bedroom Mix: 

1. In subdivisions with single-family dwelling units, each MPDU must have three or more bedrooms, unless waived by DHCA in a subdivision with only two-bedroom market rate units.
2. In subdivisions with multi-family dwelling units, the bedrooms mix of MPDUs must match the bedroom mix of the market-rate units in the subdivision, unless DHCA approves an agreement in accord with the requirements of 25A-5(e)(3).
3. In coordinating market unit bedroom ratios, efficiency and 1-bedroom ratios are maximums, 2-bedroom and 3-bedroom ratios are minimums.
4. MPDUs are not required to include dens, even if market-rate units in the same development have dens. Dens are not counted as separate bedrooms for purposes of bedroom distribution calculations. 

C. Ensure livability requirements are met: 

1. Ensure that bedroom/bathroom ratios, appliances standards, and certain features meet requirements outlined in Executive Regulation 9-21
2. Bedrooms must have full height walls, doors that lock and closets.  Master bedrooms must be at least 100 sf in size and all other bedrooms must be at least 70sf.
3. Living / dining space must accommodate a dining room set and sofa set appropriate for the number of occupants in the unit. 

D. Townhomes:

1. Back-to-back townhouse MPDUs are prohibited unless it can be demonstrated that no other unit type is suitable to the site, that the disadvantages associated with that unit type are eliminated in the site design, and the MPDUs are scattered among market rate back-to-back units.
2. Encourage integration of units with market rate units. Clusters of MPDUs are strongly discouraged.
3. Townhouse sticks may contain only MPDUs, but MPDU-only townhouse sticks should not be clustered. 

E. Garden Apartments (4 stories or fewer): 

1. A mix of MPDU and market rate units are encouraged on a single garden apartment stairwell.
2. If a development contains MPDU-only apartment stairwells, they must be distributed among other market rate stairwells. MPDU-only apartment stairwells are discouraged to be located adjoining other MPDU-only stairwells.
3. MPDUs are not required to be located on “premium” floors, nor are they required to have “premium locations” on a floor (for example, in terms of view, access to building amenities, etc.)
4. No more than 40 percent of the total number of units on any floor should be MPDUs. This does not apply to developments that are sold or rented under an approved federal, state, or local low- or moderate-income housing program.
5. Bedrooms without windows are only permitted if market rate units also have bedrooms without windows.
6. Clusters of 3 or more MPDUs are discouraged.

Guidelines for Locational Features:

F. Encourage innovative site and building configurations for townhouses, piggyback townhouses, quadraplexes, triplexes, duplexes, small-lot detached units, and apartments. Solicit comments from agencies most familiar with the market, delivery, and life of MPDUs prior to preparation of site plans for review. 

G. Developments should facilitate access for MPDUs to: 

1. Public Facilities - Continue to advocate siting of MPDUs to facilitate access to public facilities.
2. Usable open space, age-appropriate recreation, and congregating areas near units.

a. Ensure that open space and recreational facilities which are required for site plan approval are equally available to all residents, regardless of income or unit type.

b. Where off-site recreation facilities are allowed, locate MPDUs nearby unless additional, age-appropriate facilities are located near the MPDUs.

c. In townhouse and garden apartment areas where residents lack individual private and defensible yards, continue to require open space areas which are adjacent and useable; steep slope and inaccessible open space areas are insufficient. Adequate parking for residents and guests

d. Adequate provisions for storage and garbage collection.

H. Permit enough clustering of single-family detached and duplex MPDUs to take advantage of production and marketing efficiencies.

I. Phase construction so that:

1. MPDUs are built along with or before other dwelling units;
2. No or few market rate dwelling units are built before any MPDUs are built;
3. The pace of MPDU production must reasonably coincide with the construction of market rate units; and,
4. The last building built must not contain only MPDUs. 

J. Clearly state on the preliminary plan and record plat that the site provides MPDUs, the locations of which will be or are shown on the site plan. 

K. Clearly identify the number of MPDUs to be provided and the percentage of all development that the MPDUs represent on all site plan applications and signature set drawings.

1. For garden apartments and high-rise buildings, the individual units can be identified at the time of the Agreement to Build. If individual units are not identified at site plan, they must still meet base unit requirements which will be reviewed at the time of the Agreement to Build. Failure to provide MPDUs that meet base standard requirements may result in the need for a site plan amendment.
2. Individual MPDUs should be highlighted on the site plan or floor plan, as applicable.

Once the specific MPDU requirement has been set as part of the development review and approval process, the developer must execute an Agreement to Build Moderately Priced Dwelling Units with the Department of Housing and Community Affairs (DHCA). This agreement must be executed before building permits will be issued by the Department of Permitting Services (DPS).

Along with the standard form document, the Agreement to Build must include: (1) a listing of the individual addresses of the MPDUs and the market rate units; (2) an unexecuted copy of the standard MPDU restrictive covenants (either for sale or rental, depending on the development); and (3) a copy of the certified site plan with the MPDUs clearly highlighted.

The Agreement to Build is the document that enforces the development requirements of Section 25A-5 of Chapter 25A (the Moderately Priced Housing law). Among other things, this agreement requires that: 

• A specific number of MPDUs must be constructed on an approved time schedule;
• In single-family dwelling unit subdivisions, each MPDU must have 3 or more bedrooms; and,
• In multi-family dwelling unit subdivisions, the number of efficiency and one-bedroom MPDUs each must not exceed the ratio that market-rate efficiency and one-bedroom units respectively bear to the total number of market-rate units in the subdivision.

Additionally, the Agreement requires that the construction phasing requirements for building MPDUs comply with the law so that: 

• MPDUs are built along with or before other dwelling units;
• No or few market rate dwellings are built before any MPDUs are built;
• The pace of MPDU production reasonably coincides with the construction of market rate units; and,
• The last building built must not contain only MPDUs.

Please refer to Chapter 25A (Moderately Priced Housing Code and Regulations) to review the full requirements of the law.

Amendments to the Agreement to Build: If at any time there is a change in an MPDU requirement for a development (due to a site plan amendment, for example), or if the construction schedule contained in the agreement changes, the developer must notify DHCA and request an amendment to the Agreement to Build to reflect the changes. Failure to do so may result in sanctions ranging from "stop permitting" orders to civil fines. 

NOTE:  Access Standard Forms (MPDU Agreement to Build template and checklist) here.

Step 1: Developer Submits an Offering Agreement: At the time the MPDUs are ready to be offered for sale or rent to eligible MPDU certificate holders, the developer/builder must submit a standard form document to DHCA for its review and approval.

• For Sale: In "for sale" developments, the Offering Agreement may be submitted no more than 365 days from the expected delivery date of the MPDUs. Larger developments, or developments that are built out over a greater length of time may require more than one Offering Agreement to make all the required MPDUs available to certificate holders. DHCA staff will work with developer/builders to schedule multiple offerings in the most efficient manner.  
• Rental: For rental developments, the Offering Agreement may be submitted up to 120 days from the date the rental units will be available for use and occupancy by qualified tenants (as determined under the county's building code requirements). In the case of staggered unit delivery over a longer period of time, more than one offering agreement may be required. 

Step 2: DHCA Notifies HOC and certain non-profit organizations: Once DHCA has approved the Offering Agreement, DHCA staff notifies the Montgomery County Housing Opportunities Commission (the County's public housing authority) and certain non-profit organizations of the offering. These agencies have 21 days to review the offering and make their selection of units, if any. (Under law, HOC and the non-profits are eligible to purchase up to 40% of the units offered; HOC may choose up to 1/3 of the units for itself). If any of these agencies choose to purchase some of the MPDUs, that agencies' staff will work directly with the developer/builder's sales agent. 

Step 3: Sales RSD or Rental Leasing

• Sales units –
  • DHCA Schedules the MPDU Drawing for eligible MPDU Certificate Holders: Concurrent with the above agencies' review, DHCA staff will work with the sales agent to finalize the advertisement flyer that will be published on the MPDU website and schedule the Random Selection Drawing (the RSD). The RSD will be set for a date that is shortly after HOC and the non-profits decision period ends. The 90-day priority offering period required under the MPDU law begins on the date of the drawing (the "priority offering period" is the period of time during which the MPDUs may be offered only to eligible MPDU certificate holders).  
  • Developer offers MPDU units to MPDU Applicants: From the RSD, DHCA will generate a list of names that will be forwarded immediately to the developer's sales agent. The sales agent then contacts the MPDU certificate holders in the order that their names appear. The sale process for an MPDU is a private transaction between the developer/builder and the MPDU certificate holder. While DHCA certifies for-sale program participants as eligible and provides names to the developer/builder, DHCA does not act as an intermediary, or involve itself in the process except in the rare case of a dispute between the two parties. 
• Rental Leasing -
  • The rental process for an MPDU is a private transaction between the leasing office the MPDU Applicant.  While DHCA provides training for each development, the leasing office will review all applications and confirm applicant eligibility.  DHCA will set initial rents and review annual reporting for compliance with the program.

Note : Access Standard Forms (MPDU worksheets and form templates)  here.

To enforce MPDU program rules and requirements, DHCA requires several forms for each MPDU purchaser or renter. Some of the forms are generated by the MPDU program while others are copies of forms signed at contract signing, leasing date, or settlement. 

Sales: The following forms are required for each purchaser of an MPDU; some must be signed at contract signing, and some are due after settlement has occurred: 

• After Contract Signing (the following must be received at least 30 days prior to settlement):
  • the original copy of the Purchaser's Agreement form
  • the original copy of the purchaser's Acknowledgement of Receipt of Covenants
  • the purchaser's original Certificate of Eligibility from the MPDU office
  • the purchaser's original Homebuyer's Seminar Certificate
  • a copy of the initial sales contract or agreement
• After Settlement (within 45 days)
  • a copy of the final settlement sheet
  • a copy of the two-party deed
  • a copy of the financing statement recorded against the proceeds of sale

Rentals: The following documents must be sent to the MPDU office within 14 days of the date of lease ratification on an MPDU rental unit:

• MPDU Renter's Agreement
• MPDU Lease Addendum

Note : Access Standard Forms (MPDU worksheets and form templates) here.

DHCA works with Developer to Determine MPDU Sales Prices and Rents, based on Executive Regulations: Developers/builders may hold initial discussions with DHCA staff to explore sales prices and rents at any time during the development and planning phases (this is especially true in the case of high cost, high rise buildings). However, the final sales prices and rents for MPDUs are set at the time the Offering Agreement is executed. The methodology used to determine sales prices and rents for MPDUs is outlined in COMCOR 25A.00.01 .

For Sale MPDUs: Sales prices for MPDUs are developed according to DHCA's minimum specifications and price standards in effect at the time the prices are calculated for inclusion with the Offering Agreement. Prices are calculated using a sales price worksheet. DHCA must review the sales prices calculated using these standards and compare the resulting price against the ability of MPDU certificate holders to afford the unit. Sales prices are modified every February based on the adjusted CPI-U average over the previous 5 years. See the MPDU Standard Forms page for the latest price factors and updated worksheets to determine MPDU sales prices for new development.

In order to help make MPDUs available at an affordable price, DHCA allows, among other things: a) MPDUs may be smaller in terms of square footage; b) the finishes of MPDUs may be of a lower standard than for market rate units (for example, Formica countertops instead of granite, and/or standard builder grade cabinetry instead of hard wood finishes, standard builder grade plumbing fixtures instead of top of the line fixtures, etc.); c) in single-family detached subdivisions, MPDUs may be single-family attached units; and d) some interior space, such as basements, third bedrooms, and lofts may be left unfinished and extra bathrooms may be roughed-in and left unfinished.

Rental MPDUs: The rental rates for MPDUs are set according to a household's ability to pay. The household maximum income for renters in the MPDU program is set for garden apartments (4 stories or less) at 65% of the area median income (AMI) for the Washington MSA while high rises (5 stories or more) is set at 70% AMI.  DHCA then uses a housing cost standard under which households pays no more than 25% of their gross monthly income toward rent. Rents may be adjusted to reflect utilities paid by the apartment complex. For detailed information, see Calculating Rental Rates for MPDUs.

Waiver of Certain Fees: Please note that the Systems Development Charge (SDC) imposed by the Washington Sanitary Sewer Commission (WSSC), and the development impact tax collected by DPS is waived for MPDUs. MPDUs also qualify for "green tape" processing status at DPS.

Note : Access Standard Forms (MPDU worksheets and form templates)  here.