2.1 Application and Certification.
(a) A household that wants to purchase an MPDU must apply to the Department to be certified as eligible for participation in the Purchase Program. To determine whether a household meets the minimum eligibility requirements, the following information and documentation must be provided to the Department: a copy of the most recently filed federal income tax return and W-2 forms, copies of divorce or separation agreements (if applicable or if most recent tax return was filed as “married”), copies of the two most recent employment pay check stubs from each current employer, and a mortgage pre-qualification letter from a lender approved by the Department in the format required by the Department. All the required information and documentation listed above must be provided for every wage earner in the household. The Department reserves the right to require certified copies of a household’s United States Internal Revenue Service (IRS) tax forms.
(b) A household that wants to rent an MPDU in the Rental Program must apply directly to Apartment Complexes that include rental MPDUs. To determine whether a household meets the minimum eligibility requirements and has sufficient income to rent an MPDU in the Apartment Complex, the Applicant must obtain and review the following information and documentation from the household: copies of the two most recently filed federal income tax returns and W-2 forms, copies of divorce or separation agreements (if applicable or if most recent tax return was filed as “married”), and copies of the two most recent employment pay check stubs from each current employer for every wage earner in the household. The Applicant may also require the household to submit other information typically collected for market-rate households. Prior to leasing any MPDUs, an Applicant must obtain training from the Department about the steps and documentation required to find a household eligible to participate in the Rental Program. The Department must annually notify Applicants of the applicable income limits and other eligibility criteria. Applicants must provide the Department with the documentation required in Section
25A.00.02.06.5(b).
(c) Households who do not have the required federal tax information because they did not live in the United States at any time during the applicable time period must supply a copy of their passport and the passports of each household member indicating their dates of entry and exit to the United States. In addition, these households must supply evidence from the IRS verifying that they have not filed federal income taxes in the previous one (1) or two (2) years, whichever is applicable.
(d) A household that includes a person who is self-employed must demonstrate that they meet the Program’s income guidelines by providing evidence and documentation in a form acceptable to the Department.
(e) Based on demand, the Department may at times set defined time periods during which applications for sales certificates will be accepted.
(f) Within 30 days of receiving a complete application, the Department will issue households determined to be eligible to purchase an MPDU a non-transferable Certificate of Eligibility which contains an expiration date. The expiration date for Certificates of Eligibility is 12 months from the date of approval of the Certificate. In order for a Certificate Holder to continue to be eligible to participate in the Purchase Program, the Certificate Holder must apply to renew the Certificate of Eligibility no earlier than 60 days prior to the expiration date, and must demonstrate that their household continues to meet all eligibility requirements in effect at the time of renewal.
2.2 Requirements for Eligibility - Income. To determine a household’s eligibility for the Program, except in circumstances described in subsection (d) below, the Department (for sales MPDUs) or the Applicant (for rental MPDUs) must determine that the household’s total income is at least equal to the approved minimum and does not exceed the approved maximum income limits for sale or rental housing in effect at that time. The Department may adopt uniform policies for determining how household annual gross income must be calculated.
(a) Maximum Income - MPDU Sales. The Director of the Department must annually set the maximum incomes allowed under the Rental and Purchase Programs according to the following procedures. The maximum income required to purchase an MPDU or to rent a High-Rise MPDU is set at 70 percent of the AMI for a household size of four (4). The 70 percent figure for a household of four is then multiplied by the following adjustment factors to determine the maximum income allowed for various household sizes. The resulting figure is rounded to the nearest $500.
Household Size | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
Adjustment Factor | .70 | .80 | .90 | 1.00 | 1.08 | 1.16 | 1.24 | 1.32 |
(b) Maximum Income - MPDU Rental. The maximum income to rent an MPDU in a Garden Apartment is set at 65 percent of the AMI for a household size of four (4). The 65 percent figure for a household of four is then multiplied by the following adjustment factors to determine the maximum income allowed for various household sizes. The resulting figure is adjusted to the nearest $500.00.
Household Size | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
Adjustment Factor | .70 | .80 | .90 | 1.00 | 1.08 | 1.16 | 1.24 | 1.32 |
(c) If the change in AMI from the preceding year is negative, the Director may either maintain the maximum income at the previous year’s level or adjust the maximum income by the percentage change in the Consumer Price Index for the preceding 12-month period.
(d) At the time the new income limits are set each year, the Department shall compare the maximum income needed to purchase an MPDU for a household size of one with the starting salary for a teacher (Bachelor’s degree) in the Montgomery County Public School System. If the Department determines that the maximum income figure under the Program would preclude the participation of a first year teacher in the school system, the Director may adjust the income limits accordingly to allow the participation of first year teachers.
(e) Minimum Annual Incomes. Each year the Department may determine and set a minimum annual income for participation in the Program. If a minimum is set, it must be set at the minimum annual income needed to qualify for a mortgage to purchase an MPDU, or to make a rental payment for an MPDU, as determined by the Department.
(f) Income is defined as the gross income received annually from all sources by all wage earners in a household. Sources of income include, but are not limited to, the following:
(4) Interest from savings and checking accounts;
(5) Dividends from stocks and bonds, and interest from certificates of deposit;
(6) Social Security benefits;
(7) Veterans Administration benefits;
(9) Unemployment insurance benefits;
(11) Pension and retirement payments;
(12) Long-term Disability benefits;
(13) Any other annuities or stipends received; and
(14) Gifts from third parties, the value of which may be limited by Executive Order.
(g) When an Applicant fulfills the MPDU requirement for a particular development through the construction of housing under other federal, state, or specific local programs to assist low- and moderate-income households, the income limits and other requirements of that particular housing program apply rather than the requirements set forth herein during the term of the compliance period for that housing program.
2.3 Special Income Exception for Conversion of Rental MPDUs to Condominiums. A household that rents an MPDU and lawfully occupies it at the time the MPDU is offered for sale must be offered to right-of-first refusal to purchase the MPDU regardless of the household’s income as long as the household qualifies for the financing necessary to purchase the MPDU, and the household was income-eligible at the time that the household first rented the MPDU. This right-of-first refusal is effective for 60 days from the date the household is given notice that the MPDU is to be offered for sale. If the household does not sign a contract and secure financing within the 60-day period, the MPDU must be offered to Eligible Certificate Holders.
2.4 Requirements for Eligibility - Restrictions on Ownership of Residential Property. To be eligible to buy or rent an MPDU other than an age-restricted unit, members of a household must not have owned any residential property during the previous five (5) years, and can never have owned an MPDU.
2.5 Requirements for Certificate of Eligibility. To be eligible to receive a Certificate of Eligibility to purchase an MPDU, at least one adult member of the household must complete the following classes approved by the Department:
(a) A first-time homebuyer class;
(b) An MPDU orientation seminar; and
(c) An MPDU application session.
2.6 Occupancy Requirement for MPDUs.
(a) Except for the Commission or Designated Agencies that purchase or lease MPDUs under Chapter 25A, MPDU renters and MPDU Owners must occupy the MPDU as their primary residence and must execute and submit to the Department a Purchaser’s or Renter’s Agreement Form provided by the Department, which certifies that the household must occupy the MPDU during the entire Control Period or until the MPDU is sold or is relinquished in accordance with the MPH Law and this regulation. If an MPDU Owner dies, at least one heir, legatee, or other person taking title by will or by operation of law must occupy the MPDU as their primary residence during the Control Period in order to fulfill the occupancy requirements of this Section.
(b) Before an MPDU Owner purchases other residential property during the Control Period, the owner must first sell the MPDU under the Purchase Program as specified in this regulation. Once the MPDU Owner has entered into a sales contract with a buyer for the MPDU and a settlement date has been scheduled, the MPDU Owner may enter into a sales contract for another property. When the renter of an MPDU closes on another residential property, the renter must vacate the MPDU and may not rent another MPDU.
(c) MPDU Owners who are granted permission by the Department to temporarily rent their MPDUs must obtain a rental license from the Department, and must sign a lease with the tenant household. The MPDU Owner must use the appropriate model lease approved by the Department. The term of the lease must not exceed the time period granted by the Department as reflected in the Reoccupancy Certificate. Within 30 days of the date that the tenant household signs the lease, the MPDU Owner must provide the Department with a copy of the fully executed lease, a copy of the rental license, and the original of the Reoccupancy Certificate.
(d) If an MPDU Owner fails to occupy the MPDU as their primary residence and has not received written permission from the Director to rent or vacate the MPDU temporarily, the MPDU must be sold in accordance with Chapter 25A.
