MPDU Information
Moderately Priced Dwelling Units

Getting Started in the MPDU Process

Where can I get an application for the MPDU program?
MPDU applications are available from the City of Rockville Department of Community Planning and Development Services, 111 Maryland Avenue, Rockville, MD 20850. If you want an application sent to you, you may call the Department at 240.314.8200 or you may download an application form:

• MPDU Program Application
• MPDU Renewal Application
• Current Resale Value
• Montgomery County  MPDU Certificate Holder Application to Request a City of Rockville MPDU Certificate

What are the current maximum income limits?

• 1 person family  $44,600
• 2 person family  $50,900
• 3 person family  $57,300
• 4 person family  $63,700
• 5 person family  $68,800

If an applicant is self-employed, they must submit a year-to-date income and expense statement prepared by either the applicant or a financial professional. If a person cannot find copies of past income tax information, they need to contact the IRS at 1-800-829-1040 and request a summary for the items that are missing. If a person did not file a tax return because they were a student, a copy of a school transcript should be provided to show that the individual was a full-time student during the applicable tax year. If an applicant submits a pre-qualification letter from a mortgage lender, it is not necessary to provide a credit report.

Does someone have to be a U.S. citizen to apply to the program?
No. If you are new to the USA and did not file taxes because you were not here during the previous two years, a copy of the first page of a passport and a copy of the page with the date of entry stamp must be submitted.

After a person submits an application for a Certificate of Eligibility, about how long does it take to receive the certificate?
It takes approximately three weeks to review the application. If an applicant meets the eligibility requirements, an MPDU Certificate will be mailed out within three to four weeks of the application being received by the City of Rockville. If an applicant does not receive a Certificate within five 3weeks, then it is appropriate to call to discuss the status of the application.

How long is a Certificate valid? When a Certificate expires, can it be renewed?
A Certificate is valid for one year from the date of issue and may be renewed. At the time of renewal, applicants must submit documentation that shows that their income limits still fall within the eligibility guidelines of the MPDU program. To apply for renewal of an MPDU Certificate, all working adults in the household must have their employers complete the Verification of Employment form, which then must be submitted to the City along with copies of the two most recent pay stubs for all working adults. The City must receive this prior to the expiration of the MPDU Certificate.

If a person or family has an MPDU Certificate from Montgomery County, will the Rockville MPDU program recognize that certificate?
Once an individual or family has a certificate from the Montgomery County MPDU program, the City of Rockville will recognize that certificate and issue the holder a Rockville certificate. In order for a Rockville certificate to be processed, you must bring your original valid MPDU certificate from the County to the City’s Community Planning and Development Services Department located in Rockville City Hall.

What types of units are available through the MPDU program?
Most units that will be available for purchase under the Rockville MPDU program will be one and two bedroom condominiums. There have been three bedroom townhouses previously sold under the program that may become available in the future as resales. A resale of an MPDU is offered first to Rockville Housing Enterprise, and if this housing authority does not purchase it, then it will be offered to MPDU Certificate holders on the waiting list.

Rentals are generally one or two bedroom apartment units, and may be identical to the market rate units in the apartment complex. There are also a few studio or efficiency apartments in the program inventory.

Who is considered part of my household? In addition to my spouse and children, can I include my parents, siblings, or cousins?
Members of the household are those relations that are claimed as your dependents. In order to include your adult children who are in college or are students, your parents, siblings, or other relations as part of your household, they must have been claimed as dependents on your federal income taxes for at least one year, otherwise their income is part of the household income. Even though you may be responsible for their care, they must be claimed as dependents on your taxes to be included as part of your household for the purpose of the City of Rockville’s MPDU Program.

Does a person renting an MPDU have to review his/her certificate each year?
Persons who are renting MPDU units do not have to renew their certificate once they are under lease and are living in the MPDU unit.

Purchasing an MPDU

Is there a minimum income required to purchase an MPDU?
The program regulations do not specify a minimum income, but in practice an income of about $22,000 is required to be eligible because sales prices normally require at least that amount of income in order to qualify for a mortgage for an MPDU and to make the monthly mortgage payments. If a person has sufficient assets to use for a down payment that would reduce the mortgage payments, lower incomes may be acceptable.

What other financial means does an applicant need to purchase an MPDU?
In order for a person to purchase an MPDU, they must be able to qualify for financing and to pay the down payment, settlement and other costs associated with buying a home. In addition, they must have a good credit rating. The mortgage company or the leasing agent determines if an individual is qualified for financing.

Once a Certificate of Eligibility to purchase is issued, then what happens?
Once a person obtains a Certificate of Eligibility, their name is added to a list of qualified buyers. This list is given to the builders who are offering MPDUs in various developments. The list is updated periodically, when there are a sufficient number of newly qualified buyers. The builders are instructed to contact people in the order in which they appear on the list and offer them an opportunity to buy an MPDU. Your name must be on the MPDU eligibility waiting list in order to purchase an MPDU.

What if I don’t want to buy the unit that is offered to me by a builder?
If a certificate holder is not interested in the unit available from the builder who contacted them, they can decline to purchase the unit. Their name remains near the top of the list of certificate holders, which is given to future sellers of MPDUs. If a certificate holder chooses not to purchase a unit, when offered, there is no guarantee that another unit will become available. A name is only removed from the list when a certificate holder purchases a unit, or requests that his or her name be removed, or if a certificate expires and has not been renewed.

Does the type of MPDU available for purchase depend on family size?
Larger MPDUs, such as those with more than two bedrooms, are not available to individuals or senior citizens who do not have children in the household. These units are reserved for families of at least two persons. It is the goal of the MPDU program to have larger units bought or rented by families with children, when possible. Therefore, single-family homes and townhouses are specifically reserved for families with children.

What options can be added to the allowable sales price of a unit and included in a mortgage?
The options listed below may be added to the sales price of an MPDU. It is important to know that appliances are depreciating items. This means that over time they will not retain their full value. At the time of resale, appliances will not be valued at the original full purchase price. Modest additional options whose cost does not exceed $250 may also be offered; options other than those listed below may be offered, but must be paid for in cash by the purchaser. It is up to the purchaser and the seller to determine when payment is due for any options selected.

• Washer and dryer
• Dishwasher
• Upgraded refrigerator and range
• Upgraded kitchen cabinets and bathroom vanities
• Upgraded carpet and padding
• Upgraded resilient flooring
• Gas HVAC and range
• Finished optional bathrooms
• Finished optional bedrooms
• Finished basement/recreation room

Any other items not included on this list must be pre-approved by the City.

In order to buy a house under the program, it states that someone must be a “first time homebuyer.” What does this mean?
A first time homebuyer is someone who has never previously owned a home or who has not owned a home in the past five years. Even if the home you owned was in another state or country, you are not eligible for the MPDU program. If your spouse previously owned a home, you are not eligible to participate in the sales program because both husband and wife must be listed on the deed as co-owners.

Since it is the MPDU applicant who must be the first time homebuyer, in the event that your parents are your dependents and they previously owned a home, you could be eligible for the program. However, your parents must be claimed as your dependents on your past year taxes in order to claim them as your dependents for the MPDU program.

What if a Certificate holder gets a pay raise between the time a certificate is issued and he/she purchases a unit?
The household income of the Certificate holder must be within the MPDU eligibility guidelines at the time a Sales Agreement Contract is signed for the purchase of an MPDU unit. The period of time between the signing of the Sales Agreement Contract and the date of Settlement on the home can last several months. Therefore, MPDU Certificate holders may accept pay raises that may result in their income exceeding the eligibility limits. Since a contract for the purchase of a home has been entered into, it is not the intent of the MPDU Program that these situations result in breech of contract or denial of a pay increase. However, in such a situation the Certificate holder is not permitted to select a different MPDU and may only complete the transaction that has commenced; in other words, they may complete purchase on the unit for which the Sales Agreement Contract has been signed and cannot break that contract in order to purchase a larger MPDU that they may now be able to afford, in the event another MPDU is available.

Can a buyer have a cosigner for a mortgage loan?
There may be a cosigner on a loan as long as the cosigner does not appear on the deed as a co-owner. This provision is at the discretion of the individual lender.

If I buy an MPDU and have to move suddenly, can I rent out my unit? 
Buyers of MPDUs must not lease MPDUs to other parties. There is a provision in the law under which temporary rentals MAY be allowed if the City Manager finds sufficient cause to make such an allowance. Selling the unit is always an option (see section D.1.).

Renting an MPDU

What are the MPDU rents?
MPDU rents are based on a formula in the MPDU law. As of June 15, 2011, MPDU rents are as follows:

These rents apply to units for which rental contracts are written after the June 15, 2011 effective date.

How does a person apply for a rental unit?
Once a Certificate of Eligibility is issued, individuals may go directly to the leasing agents to fill out an application for a rental unit. A list of rental developments in Rockville that contain MPDUs is available from the Community Planning and Development Services Department.

How are rent increases calculated?
In March of each year, the City calculates new rental rates based on the Department of Labor’s Consumer Price Index (CPI) for the previous year.

Is there a special provision for senior citizens to get priority to rent MPDUs?
Yes. When senior citizens (over age 62) apply to rent a unit at designated rental communities, they may be given priority over other persons who are waiting to rent MPDUs. The priority provision may also be extended to other MPDUs as they become available.

Can Housing Choice Vouchers be used towards rental payments in MPDUs?
The use of Housing Choice Vouchers, formerly known as Section 8 rental certificates, can be used towards rental payments for an MPDU apartment. Holders of Housing Choice Vouchers  should check with Rockville Housing Enterprises or their appropriate housing agency when using Housing Choice Vouchers in MPDU rentals.

Housing Choice Vouchers, designated for home purchase, may be available through local housing authorities. These vouchers may be used by a homeowner purchasing a unit from an MPDU developer.

The City's Role in the MPDU Program 

• One-half percent for a permanent loan origination fee;
• County tax certificate, transfer charges, revenue stamps and recordation charges;
• Title examination, settlement, and attorney fees;
• Notary fees and fees for preparation of a deed or conveyance, a deed of trust or mortgage, and the deed of trust or mortgage note;
• House location survey plat; and
• Appraisal fees and credit report charges.

Sources: Chapter 13.5 of the Rockville City Code, Moderately Priced Housing, Regulations

MPDU Rents & Income Limits
Effective 6/15/11

The minimum income for qualifying for the City of Rockville MPDU Program is $22,000.
The maximum income limits for the City of Rockville MPDU rental and purchase program are as follows:

• 1 person $44,600
• 2 person $50,900
• 3 person $57,300
• 4 person $63,700
• 5 person $68,800

What are the MPDU rents? 
MPDU rents are based on a formula in the MPDU law. As of April 1, 2009, MPDU rents are as follows:

• Efficiency          $   929.00
• One Bedroom    $1,060.00
• Two Bedroom    $1,194.00
• Three Bedroom  $1,326.00 (Currently this size unit is unavailable)

Note: Rents may not be increased until existing lease terms expire. Rockville Landlord-tenant law requires that tenants, including tenants holding over be provided with a ninety-day written notice of a rent increase.