2.1 Rental Certification.
(a) To be certified to rent a WFH Unit, a household must apply to the Department and be determined by the Department to be eligible for participation in the program. Alternately, the Department may delegate to the individual apartment complexes the responsibility for certifying households as eligible to occupy WFH Units. To determine whether an individual or household meets the eligibility requirements, the following information and documentation for every wage earner in the household must be provided to the Department or the apartment complex:
(1) An original signed application,
(2) Copies of the two most recent previously filed federal income tax returns,
(3) The applicant’s two most recent W-2 forms,
(4) Copies of divorce or separation agreements (if applicable),
(5) Copies of the two most recent employment pay check stubs from each current employer.
(6) The Department reserves the right to require certified copies of a household’s federal tax forms and other documentation it deems necessary.
(b) Persons who do not have the required federal tax information because they did not live in the United States at any time during the previous one or two tax years must supply a copy of their passport and the passports of each adult family member indicating their dates of entry into the United States. In addition, these persons must supply evidence from the United States Internal Revenue Service verifying that they have not filed federal income taxes in the previous one or two years, whichever is applicable.
(c) A household which includes a person who is self-employed must demonstrate that they are within the Program’s income guidelines by providing evidence and documentation in a form acceptable to the Department.
(d) To be eligible to rent a WFH Unit an applicant must be a County resident and employed at an establishment located in the County, or have a written job offer to work at an establishment in the County. The Department may require additional documentation to verify eligibility if the foregoing documentation is not sufficient.
(e) A household determined to be eligible to rent a WFH Unit will be issued a Certificate of Eligibility which contains an expiration date. The expiration date of rental Certificates of Eligibility generally will be twenty-four months from the date of issuance.
(f) In the case of issuing Certificates of Eligibility for WFH Unit rental units, the Department may assign its responsibility for accepting applications and certifying an individual’s or household’s eligibility under the Program to individual apartment complexes containing WFH Units. In such cases, the Department must annually notify the apartment complexes of the applicable income limits and other eligibility criteria. In addition, the complexes must submit their application, lease, and leasing procedures t the Department for review and approval.
2.2 Purchaser Certification
(a) A Certificate of Eligibility to purchase a for sale WFH Unit will only be issued to persons selected in the lottery (described in Section 6.2 of this regulation) and who, after further verification, are found to be eligible by the Department.
(1) Eligibility List of Interested Households. The first step in being certified to purchase a WFH Unit, is for a household to apply to be placed on an Eligibility List (thereby becoming an “Interested Household”). To apply to become an Interested Household, households are required to provide self-certification of income, assets, residence, employment, proof of attendance at a County approved home buyer seminar, and other information as required by the Department in a form acceptable to the Department.
(2) Becoming a Certified Household.
(A) Interested Households selected by lottery must provide in a timely manner as determined by the Department all the documentation required of renters in Section 2.1(a) above, and also supply a pre-qualification letter from a mortgage lender in a form acceptable to the Department that includes the maximum loan amount for which the Interested Household would qualify, as well as verification of assets, and other information as required by the Department.
(B) Interested Households, selected through the lottery and found eligible by the Department will receive a Certificate of Eligibility to purchase a WFH Unit from the Department, thereby becoming a Certified Household. A Certificate of Eligibility will be applicable only to the project for which the lottery was held, with the following exception: a Certified Household who is selected in a subsequent lottery that is held within six months of the date of becoming a Certified Household will not need to be re-certified by the Department unless a change in household size, income, or some other factor affecting a household’s eligibility for the Program necessitates a re- certification. The Certified Household must notify the Department whenever such a change occurs; failure to do so will result in that household’s disqualification from the Program.
(b) When the Department determines that an Interested Household has knowingly supplied false information to qualify for purchase or rental of a WFH Unit, that Interested Household will be barred from the Program.
(c) The Department may set defined time periods during which application to the Eligibility List will be accepted, and the Department may determine if and when the Eligibility List may be temporarily closed.
(d) Homebuyer Seminar. Before a household may apply to become an Interested Household, a household must submit a certificate of completion of a Department approved home buyer seminar.
2.3 Requirements for Eligibility — Income. To determine a household’s eligibility for the Program, except in circumstances described in subsection (f) below, the Department must determine that the household’s total income is at least equal to the approved minimum and does not exceed the approved maximum income limits for sale or rental housing in effect at that time. The Department may adopt uniform policies for determining how household annual gross income must be calculated.
(a) Minimum Income — The minimum income for the Program will be the maximum income for the MPDU Program (currently 70 percent of area median).
(b) Maximum Income. By June 15th of each year, the Director must set the maximum incomes allowed under the rental and sales programs according to the following procedures. The maximum income allowed in order to be eligible for a WFH Unit is set at one hundred and twenty (120%) of the median income for a household size of four (4). These income figures for a household of four are then multiplied by the following adjustment factors to determine the maximum income allowed for various household sizes. The resulting figure is rounded to the nearest $500.
Household Size | 1 | 2 | 3 | 4 | 5 |
Adjustment Factor | .70 | .80 | .90 | 1.00 | 1.08 |
(c) If the change in median income from the preceding year is negative, the Director may adjust the maximum income by the percentage change in the consumer price index for the preceding 12 month period.
(d) In the Department’s annual report to the Council regarding the Program, the Director will report on the income limits in effect for the year and the methodology used to arrive at the figures.
(e) Income is defined as the gross income received annually from all sources by all wage earners in a household. Sources of income include, but are not limited to, the following:
(1) Wages, salary, and tip income;
(2) Child support;
(3) Alimony;
(4) Interest from savings and checking accounts;
(5) Dividends from stocks and bonds, and interest from certificates of deposit.
(6) Social Security benefits;
(7) Veterans Administration benefits;
(8) Overtime pay;
(9) Unemployment insurance benefits;
(10) Bonus payments;
(11) Pension and retirement payments;
(12) Long-term Disability benefits; and
(13) Any other annuities or stipends received.
(f) A Developer may fulfill the Workforce Housing Program requirement for a particular development through the construction of housing under other federal, state, or specific local programs to assist low and moderate income families. In such a case, the income limits and other requirements of that particular housing program must apply rather than the requirements set forth herein.
2.4 Special Income Exception for Conversion of Rental WFH Units to Condominiums. A household that rents a WFH Unit and lawfully occupies the unit at the time it is offered for sale must be offered the right-of-first refusal to purchase the WFH Unit under Title 11 as long as the household qualifies for the financing necessary to purchase the unit, and so long as the household met all eligibility standards at the date of original rental. This right-of-first refusal is governed by Title 11. If the tenant does not sign a contract and secure financing during that time, the unit must be offered to Certified Households through a method to be determined by the Department. A tenant eligible to exercise an extended tenancy right as provided in Title 11 may continue to occupy the WFH Unit through the term of the extended tenancy. Upon conclusion of the extended tenancy, the WFH Unit must be made available to a Certified Household through a method determined by the Department.
2.5 Eligibility for Purchase — Restrictions on Ownership of MPDUs. To be eligible to buy or rent a WFH Unit, a person and members of that person’s household who currently own a Moderately Priced Dwelling Unit (MPDU) in the County that is still under the MPDU occupancy and resale price controls, must sell the MPDU in accordance with that Program’s requirements. The Director may waive this restriction for good cause. The sale must occur before, or simultaneously, with the settlement on the WFH Unit.
2.6 Eligibility for Purchase — Asset limit. To be eligible to purchase a WFH Unit, an Interested Household must not have combined assets that exceed 25% of the amount for which the household is prequalified by a lender.
(a) Assets are defined as amount of money in, or value of:
(1) Paid down payment;
(2) Checking accounts;
(3) Savings accounts;
(4) Certificates of deposit and/or money market accounts;
(5) Stocks and/or mutual funds;
(6) Bonds;
(7) Real property, less outstanding debt; and
(8) Trust Funds.
(b) Assets not included in this definition include:
(1) Amount in tax deferred retirement savings;
(2) Amount in tax deferred college savings plans;
(3) Cash value of whole life insurance;
(4) Automobiles, (up to one per adult); and
(5) Cash value of Household furnishings and jewelry
2.7 Primary Residence Requirement for WFH Units.
(a) Except for the Department and Commission, tenants and owners of WFH Units must occupy the WFH Unit as their Primary Residence and must execute and submit to the Department a signed Purchaser’s or Renter’s Agreement provided by the Department at the date of original sale or rental, which certifies that he/she must occupy the WFH Unit during the entire control period or until the unit is sold or is relinquished in accordance with the Workforce Housing Law and these regulations. The tenant or owner must submit an annual re- certification stating, under the penalty of perjury, that the WFH Unit is their primary residence. If a WFH Unit owner dies, at least one heir, legatee, or other person taking title by will or by operation of law must occupy the WFH Unit as their Primary Residence during the control period in order to fulfill the occupancy requirements of this Section.
(b) During the applicable control period, before the owner of a WFH Unit purchases other residential property in the Washington Primary Metropolitan Statistical Area (PMSA), as defined by the federal Office of Management and Budget (OMB), to be used as the owner’s primary residence, the owner must first sell the WFH Unit as specified in these regulations. Before the renter of a WFH Unit purchases residential property in the Washington PMSA, the renter must surrender their WFH Unit and their Certificate of Eligibility to the Department.
(c) A WFH Unit owner who wishes permission to temporarily waive the WFH Unit occupancy requirement in order to rent his/her unit for cause must send a written request to the Director to obtain permission and a written waiver. The request must contain the reason(s) the owner desires to rent the unit and the period of time that the unit will be rented. The owner must demonstrate that he/she is required to move out of the Washington PMSA for employment or health reasons for a period not to exceed 24 months (the Director may approve a longer time period for good cause, as determined by the Department). The WFH Unit owner must certify that he/she will reoccupy the WFH Unit upon expiration of the term of the waiver, which will begin on the date the owner vacates the unit. If the owner fails to reoccupy the WFH Unit within 30 days of the expiration of the term of the waiver, the WFH Unit must be sold in accordance with the terms of this regulation.
(d) When granting a waiver to allow an owner to rent a WFH Unit, the Director must establish the allowable rent that the owner can charge during the temporary rental period. This rent must not exceed the total of principal and interest payments on a mortgage amount that is not in excess of the resale control price, real estate taxes, homeowner’s insurance, reasonable management fees, homeowners association or condominium fees, and reasonable expenses attendant to the maintenance of the WFH Unit. If the owner retains responsibility for the payment of some or all of the utility expenses and maintenance costs, these expenses may be added to the rental rate. An increase In the rent may be permitted after one year, if the owner shows that there has been an increase in the listed costs used to determine the rent. The rent increase must be approved by the Department in writing.
(e) WFH Unit owners who temporarily rent their units must extend the WFH Unit covenants for a period of time equal to the rental period. The owner must execute a new covenant in the form provided by the Department before the final written approval from the Department may be granted. The Department must record the covenants among the land records of Montgomery County.
(f) WFH Unit owners who temporarily rent their units must sign a lease with the tenant. The owner must use the applicable model lease approved by the Department. The term of the lease must not exceed the term of the waiver granted by the Department.
(g) If a WFH Unit owner fails to occupy the WFH Unit as their primary residence and has not received written permission from the Director to rent or vacate the unit temporarily, the WFH Unit must be sold in accordance with Chapter 25B.