6.1. Offering MPDUs for Sale or Rent.
(a) The Applicant must offer MPDUs for sale or rent through the Department by completing and submitting an Offering Agreement on the form provided by the Department. The Applicant must provide the documents required by Section 25A-8(b)(2) and the following:
(1) A description of the MPDUs including the number, unit types, and size by area and number of bedrooms, and other relevant details of the MPDUs;
(2) The addresses, legal descriptions and property tax account numbers of the MPDUs;
(3) A recorded subdivision plat and a copy of the site development plan designating the locations of the MPDUs;
(4) The signed MPDU Covenants, in recordable form;
(5) A copy of the building floor plans (for multi-family buildings) and the unit layouts of each MPDU unit type with dimensions and square footage;
(6) If the MPDUs are to be sold, a completed sale price calculation sheet for each unit type and a price list of options;
(7) The date(s) when MPDUs are expected to be delivered for settlement or rental occupancy; and
(8) Any other information the Department deems necessary.
(b) MPDU sale units must be available for settlement and occupancy in compliance with all County building and occupancy code requirements within 365 days of the date when the MPDUs are marketed for sale to Eligible Certificate Holders.
(c) The first MPDU rental units in a development must be available for rental occupancy in compliance with all County building and occupancy code requirements within 120 days of acceptance of the Offering Agreement by the Department.
(d) For rental Offering Agreements, the Applicant must attach an executed subordination agreement from all lien holders on the property so that the MPDU Covenants will hold a senior position, or must attach a statement by an attorney licensed to practice law in Maryland certifying that the MPDU Covenants are superior in recording order to any monetary encumbrances on the property.
(e) The Applicant may not require from an MPDU purchaser a deposit that exceeds one (1) percent of the established MPDU sales price, including options if applicable. The selection of options must be at the discretion of the MPDU purchaser and may not exceed ten (10) percent of the base sales price.
(f) Condominiums must have FHA approval or financing with similar terms.
6.2 Random Selection Drawing Process. After the Department has approved the Offering Agreement, Eligible Certificate Holders who are interested in purchasing MPDUs, other than the Commission and approved Government Agencies and Designated Agencies must be selected through a Random Selection Drawing (RSD) process conducted by the Department in cooperation with the Applicant. This process must be used to establish a list of Eligible Certificate Holders to whom the available MPDUs must be offered for sale.
(a) The Department must notify the Applicant and Eligible Certificate Holders of the proposed offering by posting a flyer with information about the unit type, price, size, number of bedrooms, number of baths, HOA or condominium fee, and other details of the MPDUs on the Department’s website, and scheduling a Random Selection Drawing. At the time a household is determined to be an Eligible Certificate Holder under the Purchase Program, the Department awards points according to the factors listed below:
(1) One (1) point for each consecutive year (12-month period) the household has held a Certificate of Eligibility for the MPDU Purchase Program, up to a maximum of three (3) points;
(2) One (1) point for living in the County, for a maximum of one (1) point;
(3) One (1) point for working in the County, for a maximum of one (1) point; and
(4) The maximum number of points that may be assigned to an Eligible Certificate Holder is five (5) points.
(b) One-person and two-person households must only be permitted to participate in Random Selection Drawings for one- and two-bedroom MPDUs. One-person and two-person households may not be permitted to purchase any MPDUs with three (3) or more bedrooms unless the drawing list of Eligible Certificate Holders containing three (3) or more people has been completely exhausted.
(c) The Random Selection Drawing must give priority to Eligible Certificate Holders according to the number of points they have been awarded, in descending order. A list of names must be developed, with the order determined by the order in which the names were drawn during the Random Selection Drawing. The Applicant must contact the Eligible Certificate Holders and offer them the opportunity to purchase the available MPDUs according to the order of the list determined by the Random Selection Drawing.
(d) Eligible Certificate Holders selected by a Random Selection Drawing must have the exclusive right to enter into a contract for the purchase of an MPDU during the Priority Marketing Period, which begins on the date of the fully executed Offering Agreement, or the date of the Department’s approval of other marketing methods, and, except as provided in subsection (e), ends 90 days thereafter.
(e) The Applicant must not offer an MPDU to non-income-eligible households unless the Priority Marketing Period has ended, the drawing list of all Eligible Certificate Holders has been exhausted, and a written notice has been obtained from the Department authorizing the Applicant to sell the MPDUs to non-income-eligible households. During the Priority Marketing Period, if the drawing list of all Eligible Certificate Holders has been exhausted, the Department may offer the MPDU to other Certificate Holders, and may waive the minimum household size requirement for that MPDU. If no Certificate Holders are interested in purchasing the MPDU, the Department may offer the MPDU to income-eligible households that are not Certificate Holders during the Priority Marketing Period. The Priority Marketing Period is automatically extended until the Department determines that no additional income-eligible households are available to purchase the MPDUs. The Department may incrementally increase the maximum income for eligibility and extend the Priority Marketing Period in 30-day increments before waiving all income restrictions. MPDUs that become available for sale after the Priority Marketing Period because of the disapproval of permanent loan financing must be offered to Eligible Certificate Holders on the drawing list. MPDUs that are offered to non-income-eligible households remain subject to the Covenants, the Code and the regulations governing the Program, except the income limitations for the initial purchaser.
(f) If an Applicant offers MPDUs for sale within six (6) months after the date of acceptance by the Department of a previous offering of MPDUs in the same subdivision, then the priority list established by the Random Selection Drawing for the previous offering may be used until the list of all Eligible Certificate Holders has been exhausted. The following provisions apply to the subsequent offering:
(1) The Applicant’s offering must contain the same type(s) of unit(s) with the same number of bedrooms per unit as were in the prior offering; and
(2) Purchasers must have a valid Certificate of Eligibility.
(3) The Priority Marketing Period for subsequent offerings begins on the date of the fully executed Offering Agreement, or the date of the Department’s approval of other marketing methods.
6.3 Offering MPDUs for Rent.
(a) The Department will provide a notice on the Department’s website of the availability of rental MPDUs to Eligible Households. MPDUs offered for rent by the Applicant may be leased without utilizing the Random Selection Drawing process unless otherwise required by the Director. The Applicant must comply with all applicable local, state, and federal fair housing laws and must rent the available MPDUs only to Eligible Households during the Priority Marketing Period. If a Random Selection Drawing process is used to rent the MPDUs, the same point system described in Section 25A.00.02.06.2(a) of this regulation may be used for ranking Eligible Households. The Department must notify the Applicant of the date on which the first lease for the property may be written. The 90-day Priority Marketing Period must begin on that date, and is automatically extended until the Department determines that no additional Eligible Households are available to rent the MPDUs. If construction or occupancy of the MPDUs is phased over a period of time, each phase must have its own Priority Marketing Period, and the Priority Marketing Period begins when the MPDUs in each phase are available for rent.
(b) During the Priority Marketing Period, the Applicant must rent the MPDUs to Eligible Households. An Eligible Household must have at least as many household members as the number of bedrooms in the MPDU.
(c) If a Random Selection Drawing is held to determine a marketing list of Eligible Households, the Priority Marketing Period begins on the date of the drawing.
(d) If the MPDUs are not rented to Eligible Households during the Priority Marketing Period and the Applicant has demonstrated to the Department’s satisfaction that a good faith effort was made to rent the MPDUs to Eligible Households, the Applicant may then rent the MPDUs to non-income-eligible households at the MPDU rental rate after receiving prior written approval from the Department.
(e) The MPDUs must be ready for occupancy within 120 days of the beginning of the Priority Marketing Period.
(f) The Applicant must use a lease form that complies with all federal, state and local laws, subject to the additions listed below.
(g) The lease agreements for MPDUs, other than those leased to the Commission or a Government Agency or a Designated Agency, must include the provisions listed below:
(h) The household must occupy the MPDU as its primary place of residence and must not sublet the MPDU.
(i) The household must provide income and household composition information to the Applicant every year for recertification purposes. The documents that must be provided are federal income tax forms for the last two (2) years, a copy of a current pay check for all employed household members, and the current household composition.
(1) The household must provide the recertification information within 30 days of receiving the recertification form from the Applicant. If the household fails to provide the recertification information within the 30-day period, the household must vacate the MPDU within 60 days of receiving notification from the Applicant that the recertification form and required documentation were not received.
(2) The household must vacate the MPDU if, at the time of re- certification, the household’s income exceeds by 30 percent the maximum eligible income necessary to qualify as an Eligible Household. The Applicant must take action necessary to have the household vacate the MPDU within 90 days of receiving information that the household’s income exceeds the maximum permitted income limit. The Applicant may substitute another unit with the same number of bedrooms within the same Apartment Complex for the existing MPDU and permit the household to occupy their present unit at a rent higher than the approved MPDU rent. A new MPDU Covenant form must be recorded subjecting the substitute unit to the MPDU Covenants.
(j) The Applicant must send a copy of each household’s signed Renter’s Agreement form to the Department within 30 days of signing the lease with the household. In addition, the Applicant must supply the information listed below in a format acceptable to the Department on an annual basis:
(1) The number of MPDUs, by bedroom count, that are leased to Eligible Households, the Commission, Approved Government Agencies and Designated Agencies and their clients who have been assigned the option to lease MPDUs.
(2) For each MPDU, the current rent, the names of the members of the household, household size, and total household income as of the date of the lease.
(3) A statement that to the best of the Applicant’s information and knowledge, the households leasing the MPDUs meet the eligibility criteria.
(4) Notices of rent increases for all MPDUs.
Upon the Department’s request, Applicants must also submit their application, lease, and leasing procedures to the Department for review and approval.
(k) If the Applicant is required to report tenant occupancy information pursuant to a governmental financing regulatory agreement, then that report may be substituted for the information required in this regulation.
(l) If the Applicant has an MPDU available to be re-rented, the Applicant must offer the MPDU to Eligible Households for a period of sixty (60) days before renting the MPDU to a non-eligible household at the MPDU rental rate. The sixty (60) day period must commence when the Department receives written notice from the Applicant of the MPDU’s availability to be leased, and the Applicant must receive written approval from the Department before leasing the MPDU to a non-eligible household.
(a) The Applicant must sign and forward MPDU Covenants in recordable form to the Department before selling or renting any MPDUs. The Covenants must be in the form required by the Department and include the restrictions contained in Chapter 25A. The Covenants must run with the land for the entire Control Period and until all requirements of Chapter 25A have been met. The Covenants must be binding on the Applicant and its assignees, mortgagees, buyers and transferees, and all other parties that receive title to the property.
(b) MPDU Covenants must be recorded by the Department and must be recorded so that they are senior to all instruments securing permanent financing. Every deed transferring an MPDU must reference the MPDU Covenants on the first page of the deed citing where the Covenants are recorded in the land records by book and page. If the Covenants cannot be recorded on the MPDU in conformance with this regulation, then the unit must not be considered as meeting the requirements of Chapter 25A.
(c) The Applicant must provide a copy of the recorded sales Covenants and a copy of Chapter 25A to MPDU purchasers at settlement. The purchasers must acknowledge in writing that they have been given a copy of the Covenants and Chapter 25A.
6.5 Sales and Rental Documentation.
(a) Sales Documentation. Within 14 days of signing the sales contract, the Applicant must submit to the Department the following information in correct form for the unit to fulfill the requirements of Chapter 25A:
(1) A copy of the executed sales contract or agreement;
(2) The purchaser’s original Certificate of Eligibility;
(3) The executed Purchaser’s Agreement form; and
(4) The executed acknowledgement of receipt of MPDU Covenants and Chapter 25A.
In addition, within 30 days after the date of settlement, the Applicant must submit to the Department the final settlement sheet and a copy of the recorded two-party deed. The deed transferring title must reference on the first page of the deed the recorded MPDU Covenants by the date the Covenants were recorded and the book and page recording references.
(b) Rental Documentation. Within 30 days of the date of the fully executed lease for an MPDU rental unit, the Applicant must submit the executed MPDU Renter’s Agreement form to the Department for the unit to meet the requirements of Chapter 25A.
