Moderate Priced Housing (MPDU)

Moderate Priced Housing is intended to assist with the housing needs of residents approaching retirement age, with consequent fixed or reduced incomes, young adults of modest means forming new households, public sector employees in moderate income ranges who wish to live within the City.

  • This group includes persons on fixed incomes, teachers, firemen, police, rescue and other public safety personnel, medical technicians and other hospital workers, nurses, and municipal employees.
  • Qualification is done through income restrictions administered by the City of Laurel.
  • Moderate Priced Housing is intended for those targeted occupations, which generally do not qualify because of levels of income to buy or rent housing in Laurel.
  • Income is 80% of the mean income for a defined area for moderately priced dwelling units.
  • Moderate Priced Dwelling Unit’s that are resold during the first thirty (30) years, after the original sale, shall not be resold for a price greater than the original selling price, plus a percentage of the unit’s original selling price equal to the increase in the cost-of-living, as determined by the Consumer Price Index, the fair market value of improvements made to the unit, an allowance for closing costs, and a reasonable sales commission if the unit is not sold within sixty (60) days to an eligible person.
  • For Moderate Priced Dwelling rental units, the amount shall be set at the beginning of the lease, and adjusted no more than 3% or the prevailing Consumer Price Index during the length of residency.  Movement to other rental units shall be regulated by a re-analysis of the income and qualifying guidelines.

 

Getting Started in the MPDU Process

Where can I get an application for the MPDU program?

Applications will be provided when units become available.

2013 Adjusted Median Household Income (80%):

  • 1   person household $46,750
  • 2   person household $53,400
  • 3   person household $60,100
  • 4   person household $66,750
  • 5   person household $72,100
  • 6   person household $77,450
  • 7   person household $82,800
  • 8+ person household $88,150

 

What must be included with the application?  If a person is self-employed, what must be submitted in lieu of a pay stub?

The applicant must include a copy of the most recent two years of federal income tax returns, a recent copy of a pay stub for every wage earner in the family, and verification of child support/alimony, if applicable.  In addition, a recent copy of a credit report must be included.

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 shall 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.

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 (3) to four (4) 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 Laurel.  If an applicant does not receive a Certificate within five weeks, 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.

What types of units are available through the MPDU program?

Since this is a new program it is anticipated that two and three bedroom units will be available for purchase under the Laurel MPDU program.

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

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 Laurel 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

 

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 MPDU’s 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 MPDU’s.  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 MPDU’s, 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 MPDU’s must not lease MPDU’s to other parties.  There is a provision in the code under which temporary rental’s MAY be allowed if the Mayor finds sufficient cause to allow such an allowance.  Selling the unit is always an option.

Renting an MPDU

 

What are the MPDU rents?

MPDU rents are based on a formula in the MPDU Code.  Maximum monthly MPDU rents are as follows (includes utilities):

  • 1 bedroom   $1,610    
  • 2 bedrooms $1,931    
  • 3 bedrooms $2,232    
  • 4 bedrooms $2,489    

These rents apply to units for which rental contracts are written after the July 1, 2013 effective date.

Note: Rents may not be increased until existing lease terms expire.

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 the City of Laurel that contain MPDU’s is available from the Department of Community Planning and Business Services.

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 citizens over age 55 to get priority to rent MPDU’s?

Yes.  When a citizen over age 55 applies to rent a unit at designated rental communities, they may be given priority over other persons who are waiting to rent MPDU’s.  The priority provision may also be extended to other MPDU’s as they become available.

The City's Role in the MPDU Program 

 

What is the control period for MPDU’s?  What does this mean in terms of reselling a unit?

The Mayor and City Council amended the City Code in March of 2008 to include a Moderately Priced Dwelling Unit Program effective July 1, 2009.  Under the legislation, the control period for both rental and for sale units is 30 years.

Units offered for sale may be resold during the 30-year control period.  However, the resale price is controlled through the MPDU program.  When an owner desires to sell a unit, they request a resale price determination from the program.  This generally includes the cost of any capital improvements made to the unit and an allowance for the increase in value of the unit during the period between the date of original settlement and the date of resale.  The increase in value is based on the Department of Labor’s Consumer Price Index (CPI). 

If a MPDU is sold or resold after the 30-year control period the restrictions on resale no longer apply.

Does the City get involved in lease agreements or mortgage financing?

No.  All purchase and lease agreements are negotiated between the MPDU applicant and the private seller.  To obtain financing, an individual works directly with a mortgage company.  Purchasers should have a good credit rating; a steady income and the house must be affordable for their family's income.

How are the prices of the units determined?

Provisions in the MPDU regulations determine the price of homes built under the MPDU Program.  Generally the prices range from about $126,900 for a 1-bedroom apartment to about $177,600 for a 2-bedroom single-family detached unit.

What closing costs are to be paid by the seller of an MPDU?

 

Loan Related Fees
  • Appraisal Fee
  • Credit Report Fee
  • Misc. Lender Fees
Prepaid or Escrow Items
  • Prepaid Interest (Per Diem)
  • Hazard Insurance (1 year)
  • Hazard Insurance Escrow
  • Prepaid Real Estate Taxes
  • Master Insurance Policy (Condo)
  • Title Charges Settlement Fee (Legal)
  • Title Insurance
Government Recording and Transfer Fees
  • Recording Fees
  • County Transfer Tax
  • State Transfer Tax
  • Recordation Tax
Additional Settlement Fees
  • Survey
  • Pest Inspection

 

 

 

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