Policies and Procedures for the Resale of MPDUs

Resale of an MPDU during the control period

The owner of an MPDU who wants to sell their MPDU during the applicable control period must contact and work with the MPDU office. If you are planning to sell your MPDU, you must request an MPDU Maximum Resale Price as soon as possible. 

Click here for a one-page summary of the process for selling an MPDU.

Step 1 - Obtain MPDU Maximum Resale Price

To resell your MPDU, first submit a resale price request form to the MPDU office or send an email to MPDU Resales  get the MPDU resale price for the unit.  Please print out the Refinance and Resale Price Request Form and include the following information with your request:

  • your name
  • the address of the MPDU
  • daytime phone number and email address
  • an itemized list of any capital improvements you have made to your home.

After reviewing your request, the MPDU office will send you the MPDU Maximum Resale Price for your MPDU and an MPDU Marketing Form. You must return the MPDU Marketing Form to the MPDU office if you decide to sell your MPDU.

The MPDU Maximum Resale Price is determined by the initial acquisition price, plus an allowance for the increase in inflation from the date of the initial settlement on the unit through the date of the resale price determination. The increase permitted for inflation is based upon the Consumer Price Index for the Washington Metropolitan are (CPI-U).  The MPDU owner can also receive credit for allowable capital improvements. 

The following is an  example  of the resale price calculation for an MPDU:

Initial Acquisition Price in 2012 $130,000
Increase in the CPI (5.8% increase since 2012) $7,540
Documented Approved Capital Improvements $3,000
Maximum MPDU Resale Price $140,540
Real Estate Commission** $8,432
Maximum MPDU Listing Price $148,972

**Real Estate Commission: MPDU owners are permitted to secure the services of a Real Estate Agent to facilitate the sale, is, as is likely, the County decides not to purchase your MPDU. When a licensed Real Estate Agent is used, the Maximum MPDU Resale Price, as determined by DHCA, is adjusted to include a listing credit up to 6% of the Maximum MPDU Resale Price (the actual percentage permitted is determined by the listing agreement signed by the Real Estate Agent and the MPDU seller).

Step 2: Notify the MPDU office that you want to sell your MPDU

After you receive your MPDU Maximum Resale Price, you must notify the MPDU program that you have decided to sell your MPDU by completing the MPDU Marketing Form that was sent to you along with the notification of the MPDU Maximum Resale Price. You can email the MPDU Marketing Form and official notification of your intent to sell your MPDU to MPDU Resales 

Step 3: The County Reviews Your Resale MPDU

The MPDU must first be offered through the MPDU office to the County and the Housing Opportunities Commission (HOC) which both have the right of first refusal to purchase your unit both during and after the controls expire. At this time, the County is not purchasing MPDUs and HOC rarely purchases resale MPDUs. However, this step is required. The MPDU office will notify you of HOC's response by email.

Step 4:  Your MPDU is offered to MPDU Program participants; Find a Real Estate Agent

If the County does not purchase your MPDU (and currently the County is not purchasing resale MPDUs), your MPDU must be offered to MPDU program participants.  You may use a licensed real estate agent to help with this process.    

Real Estate Agent training is required.  If the real estate agent is new to the MPDU program and has not previously received training from the MPDU staff, the real estate agent must contact the MPDU Office to receive instructions on how to market and sell the MPDU.  The real estate agent must market the MPDU only to MPDU Certificate Holders selected by the MPDU Office.  

All MPDU resales are handled through a Random Selection Drawing (RSD) process that is a cooperative effort between the Real Estate Agent and DHCA.  This means that the unit is advertised on the DHCA website using information supplied by the Real Estate Agent, including a marketing flyer with photos and other information about the unit, as available.  

The flyer is then displayed on the DHCA website and MPDU certificate holders can enter the RSD for the unit.  The flyer must list any required open houses with dates and times.  

Step 4A – IF NECESSARY – Obtain a Waiver and Market Your MPDU to Households Outside the MPDU program.  

If there are no interested certificate holders after all the persons on the marketing list have been contacted, then the you can request, in writing, permission to sell your MPDU to persons who do not participate in the MPDU program.  Please be aware, however, that a unit sold to non-participants remains an MPDU, and the Maximum MPDU Resale Price and all rules governing the MPDU program remain in effect.

In order to open resales to the general public, the seller must email a letter to [email protected] or send a letter to the MPDU Program, 1401 Rockville Pike, Rockville MD  20850.  The seller must wait for a written response from DHCA before marketing the unit to the general public.  Once the Real Estate agent receives a copy of the written approval from DHCA, they can then list the MPDU on the Multiple Listing Service (MLS).

When marketing the MPDU to members of the general public, the Real Estate Agent must clearly inform the interested purchaser that they and the MPDU are still subject to the requirements of the MPDU law and regulations.  The buyer must be a First-Time Homebuyer.  Furthermore, any member of the general public who is interested in purchasing the unit must meet with an MPDU staff person prior to signing a sales contract to be informed about the requirements of the MPDU program.

Step 5 – Enter into a Sales Contract with a Purchaser of your MPDU

Once a qualified buyer submits an offer on your MPDU, and you accept it, and the buyer attends a meeting with MPDU staff, the Sales Contract can be ratified.  The following documents must be provided to the MPDU office within ten (10) days of ratification of the sales contract.  The Real Estate Agent will be responsible for getting these documents to the MPDU office:

•    The purchaser’s original copy of the MPDU Certificate of Eligibility (In cases where permission to sell to a non-certificate holder has been granted this item does not apply.)

•    The original of the of the signed Purchaser Agreement form (this is an extremely important document to DHCA for enforcement purposes)

•    The signed original Receipt of Chapter 25A and MPDU Covenants

•    A copy of the executed sales contract

•    After settlement, the Real Estate Agent must send to the MPDU office the ALTA Settlement Sheet to the MPDU Office

•    After settlement, the Real Estate Agent must send to the MPDU office a copy of the two party deed

Resale after the applicable control period has expired for MPDUs that were first purchased BEFORE March 20, 1989

If an MPDU was initially offered by the builder through the MPDU Program before March 20, 1989, the owner may sell the unit on the open market after the applicable control period has expired, without restriction on the resale price and with the entire profit going to the seller. 

Resale after the applicable control period has expired for MPDUs that were first purchased AFTER March 20, 1989

For MPDUs that were initially offered by the builder through the MPDU program after March 20, 1989, the owner may sell the unit on the open market for a fair market price once the applicable control period has expired.  However, the owner must pay one-half of the excess profit into Montgomery County’s Housing Initiative Fund (HIF) in order to provide affordable housing units in the future.  The County also has the right-of-first-refusal to match the proposed fair market sales price.

Click  here  for a summary of the process for selling an MPDU after the applicable control period has expired for MPDUs that were first purchased After March 20, 1989.

The following example shows how the County’s portion of the excess profit is calculated.  The example assumes an initial purchase price of $65,000 in 1995, and a current market sales price of $200,000:

Initial Acquisition Price in 1995 $65,000
Increase in CPI (56% increase between 1995 and today) $36,400
Documented Capital Improvements $5,000
Real Estate Commission (6% of sales price) $12,000
½ of Transfer Tax & Recording Fee (1.1% of sales price) $2,200
Adjusted Base $120,600

Fair Market Sales Price (as shown on sales contract) $200,000
Less:  Adjusted Base (from above) $120,600
Excess Profit (the Difference Between Adjusted Base and the Fair Market Sales Price) $79,400

Share of Excess Profit to Owner (50%) $39,700
Share of Excess Profit to County (50%) $39,700

Total Proceeds to Seller (Sales Price less shared profit payment to the County) $160,300
Total Shared Profit to County $39,700

In order to calculate the shared profit that will be due to the County upon sale of the MPDU, the owner must provide the County with a signed copy of the sales contract as soon as possible after it is signed.  In order to receive credit for eligible improvements, the owner must also submit a list of improvements, showing the cost of each item, as well as documentation of the cost (such as receipts or cancelled checks).  Finally, the owner must provide the name, contact information, phone and fax number for the settlement attorney. Allow 21 days before settlement for this calculation.