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Montgomery County MPDU Homeownership Program
First Time Home Buyer
Montgomery County
Closing Cost Assistance
Down Payment Assistance
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 […]

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.  New and some resales homes have 30 year controls; other 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 profit to Montgomery County.
  • 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.

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 March 17, 2016):
      Eligible Household Size
      and Maximum Income
      Household Size Maximum Income
      1 $53,500
      2 $61,000
      3 $69,000
      4 $76,500
      5 $82,500
      6 $88,500
      7 $95,000
      8 $101,000
  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 (click the link below)

Montgomery County Homeownership Program