6.1 Offering WFH Units for Sale or Rent.
(a) The Developer must offer WFH Units for sale or rent through the Department by completing and submitting an Offering Agreement in a form determined by the Department. The following information and documentation must be provided:
(1) A description of the WFH Units including the number of units, unit types, and size by area and number of bedrooms, and other relevant details of the WFH Units;
(2) The addresses, legal descriptions, and tax account numbers of the WFH Units;
(3) A recorded subdivision plat, a copy of the approved preliminary plan, and two copies of the site development plan designating the location of the WFH Units;
(4) The Declaration of Covenants, in recordable form;
(5) A copy of the floor plans of each unit type,
(6) The date(s) when WFH Units will be delivered for settlement or rental occupancy;
(7) If the units are to be sold, a completed “maximum sale price” calculation; if the units are to be rented, a schedule of approved maximum allowable rents by unit type and bedroom size; and,
(8) Any other information the Department deems necessary.
(b) WFH Units for sale must be available for settlement and occupancy in compliance with all County building and occupancy code requirements within 365 days of acceptance of the Offering Agreement by the Department.
(c) WFH Units for rent must be available for rental occupancy in compliance with all County building and occupancy code requirements within 120 days of acceptance of the Offering Agreement by the Department.
(d) The Developer may not require from a WFH Unit purchaser a deposit that exceeds one percent (1%) of the established WFH Unit sales price.
6.2 Random Selection Process for WFH Unit Purchasers. After the Department has approved the Offering Agreement, Interested Households must be selected through a random selection drawing process conducted by the Department . This process must be used to establish a priority list of Interested Households who will be permitted to complete the verification process in order to be given a Certificate of Eligibility to purchase a WFH Unit.
(a) The Department must notify Interested Households of the offering in a form to be determined by the Department. The form chosen may require self certification of information as required by the Department to assign priority points and conduct the drawing. If the information provided by Interested Households is insufficient and/or inaccurate, those Interested Households will not be entered in the drawing. Based on the information provided, the Department awards points according to the factors listed below:
(1) One (1) point for primary employment of at least one household member as a public employee of the County, a municipality in the County, the County Public Schools, or of a local government sponsored enterprise serving Montgomery County, including, but not limited to the Housing Opportunities Commission, the Maryland-National Capital Park and Planning Commission, and the Washington Suburban Sanitary Commission, for a maximum of one (1) point;
(2) One (1) point for participation in an employer housing assistance program recognized by the Department, for a maximum of one (1) point;
(3) One (1) point for living in the County at the time of application to the lottery, for a maximum of (1) point;
(4) One (1) point for employment at an establishment located in the County, or for having a written job offer to work at an establishment in the County at the time of application to the lottery, for a maximum of one (1) point; and
(5) One (1) point for current owners or renters of Moderately Priced Dwelling Units (MPDUs) in the County.
(6) The maximum number of points that may be assigned to a lottery participant is five (5) points.
(b) One person households may only purchase efficiency and one bedroom WFH Units; two person households may purchase WFH Units containing up to two bedrooms. Three or four person households may only purchase two or three bedroom WFH Units. Five person households may only purchase WFH Units with three or more bedrooms. An exception may be made for a Certified Household when WFH Units remain after all Certified Households of a larger household size above them on the lottery list have already selected their units. The Director may waive this limitation for good cause.
(c) The drawing will commence by drawing first from among those lottery participants who have been assigned the highest number of points. A priority list of names must be developed, with the order determined by the order in which the names were drawn.
(d) If there are WFH Units remaining in excess of the number of participants on the list, the drawing will continue and will be conducted among those assigned the next highest number of priority points. This process must continue until the Department determines that there are a sufficient number o participants for whom the available WFH Unit may be made available for sale.
(e) The Developer must offer to Certified Households highest on the list the first opportunity to purchase the available WFH Units and must proceed in order according to the order indicated on the list.
(f) Certified Households selected by a drawing must have the exclusive right to enter into a contract for the purchase of a WFH Unit. The Priority Marketing Period begins the day the Department submits a list of Certified Households to the Developer and must end 90 days after the date of commencement, unless extended by the Department for cause.
(g) The Department may incrementally increase the maximum income for eligibility and extend the Priority Marketing Period in 30 day increments before opening the sales up to the general public.
(h) The Developer must not offer WFH Units to the general public unless the Priority Marketing Period has ended, the list of all Certified Households has been exhausted, and a written notice has been obtained from the Department authorizing the sale to the general public. The Priority Marketing Period is automatically extended unless the Department determines that no additional eligible persons are available to purchase the WFH Units. WFH Units that become available for sale after the Priority Marketing Period because the contract purchaser is not approved for permanent loan financing must be offered to Certified Households on the lottery list. WFH Units that are offered to the general public remain subject to all the regulations and laws governing the Program, except the income limitations.
(i) If a Developer offers WFH Units for sale within 6 months after the date of acceptance by the Department of a previous Offering Agreement for WFH Units in the same Project, then the lottery forms that were submitted for the previous offering may be used to generate a new lottery list through a new lottery drawing. The following provisions apply to the subsequent offering:
(1) The Developer’s offering must contain the same type(s) of unit(s) with the same number of bedrooms per unit as were in the prior offering; and
(2) Interested Households must obtain a Certificate of Eligibility from the Department, and they must not exceed the approved maximum WFH Unit income limits at the time the purchaser applies for mortgage financing.
(3) The Priority Marketing Period for these subsequent offerings begins on the date the Department submits a list of Certified Households to the Developer.
6.3 Offering WFH Units for Rent.
(a) WFH Units offered for rent by the Developer may be leased without utilizing the lottery process unless otherwise required by the Director at the time the Department approves the Offering Agreement. The Developer must comply with all applicable local, state, and federal housing laws and must rent the available WFH Units only to Certified Households during the Priority Marketing Period. If a lottery process is used to rent the WFH Units, a similar point system as that described in this regulation may be used for ranking Certified Households. The Department must notify the Developer of the date on which the first lease for the property may be written. The Priority Marketing Period must begin on that date, and must end 90 days after the date of commencement unless extended by the Department.
(b) During the Priority Marketing Period the Developer must rent the WFH Units to Certified Households.
(c) If a lottery drawing is held to determine a marketing list of Certified Households, the Priority Marketing Period begins on the date of the lottery drawing.
(d) If the WFH Units are not rented to Certified Households during the Priority Marketing Period and the Developer has demonstrated to the Department’s satisfaction that a good faith effort was made to rent the units to Certified Households, the Developer may then rent the units to the general public at the WFH Unit rental rate after submitting a written request to the Department and receiving written approval from the Department.
(e) The Priority Marketing Period is automatically extended unless the Department determines that no additional Certified Households are available to rent the WFH Units. If construction or occupancy of the WFH Units is phased over a period of time, the Priority Marketing Period begins when each WFH Unit is offered for rent. Each phase of the development must have its own Priority Marketing Period.
(f) One person households may only rent efficiency and one bedroom WFH Units; two person households may rent WFH Units containing up t two bedrooms. Three or four person households may only rent two or three bedroom WFH Units. Five person households may only rent WFH Units with three or more bedrooms.
(g) The WFH Units must be ready for occupancy within 120 days of the beginning of the Priority Marketing Period.
(h) The Developer must use the appropriate multi-family model lease approved by the Department subject to the additions listed below.
(i) The lease agreements for WFH Units, other than those leased to the Commission, must include the provisions listed below:
(1) The tenant must occupy the unit as his or her Primary Residence and must not sublet the unit.
(2) The tenant must provide income and household composition information to the Developer every year for re-certification purposes.
(j) Rental Income Re-certifications.
(1) At the time of annual income re-certification the tenant must provide federal income tax forms for the most recent year and a copy of the two most recent pay checks for all employed household members and the current household composition.
(2) The tenant must provide the re-certification information within 30 days of receiving the re-certification form from the Developer. If the tenant fails to provide the re-certification information within the 30 day period the tenant must vacate the unit within 60 days of receiving notification from the Developer that the re-certification form and required documentation was not received.
(3) The tenant must vacate the WFH Unit if, at the time of re-certification, the tenant’s income exceeds by thirty percent (30%) the maximum eligible income necessary to qualify as an eligible person. After receiving information that a tenant’s income exceeds the maximum permitted income limit, the Developer must take action necessary to have the tenant vacate the WFH Unit within 60 days of the Developer receiving the information, or by the end of the tenant’s current lease term, whichever is later.
(k) Substitution of WFH Rental Units. The Developer may substitute another unit with the same number of bedrooms for the existing WFH Unit and permit the tenant to occupy their present unit at a rent higher than the approved WFH Unit rent. A new covenant form must be recorded subjecting the substituted unit to the WFH Unit covenants. If the development is subject to a governmental financing regulatory agreement, the provisions contained in that agreement supersede this regulation.
(l) Information to be Sent to the Department.
(1) The Developer must send a copy of the initial and all renewal leases to the Department within 30 days of signing the lease. In addition, the Developer must supply the information listed below in a format acceptable to the Department on an annual basis:
(A) The number of WFH Units, by bedroom count, that are leased to eligible persons, or the Commission.
(B) For each WFH Unit, the tenant’s name, household size, and total household income as of the date of the lease.
(C) A signed affidavit stating that to the best of the Developer’s information and knowledge, the tenants who are leasing the WFH Units meet the eligibility criteria.
(D) A copy of each new or revised WFH Unit Renter Agreement obtained since the last annual report.
(2) If the Developer is required to report tenant occupancy information pursuant to a governmental financing regulatory agreement, then that report may be substituted for the information required in these regulations.
(m) Renting WFH Units to the General Public. If the Developer has a WFH Unit to be re-rented, the Developer must notify the Department and offer the unit to Certified Households for a period of sixty (60) days before renting the WFH Unit to the general public at the WFH Unit rental rate. The sixty (60) day period must commence when the Department receives written notice from the Developer of the unit’s availability to be leased. The Developer must not rent WFH Units to the general public unless permission has been granted in writing by the Department.
6.4 WFH Unit Covenants.
(a) The Developer must sign and forward WFH Unit covenants in recordable form to the Department before selling or renting any WFH Units. The covenants must be in the form required by the Department and include the restrictions contained in Chapter 25B. The covenants must run with the land for the entire control period and until all requirements of Chapter 25B have been satisfied. The covenants must be binding on the Developer, all assignees, mortgagees, buyers, and all other parties that receive title to the property.
(b) WFH Unit covenants must be recorded by the Department and must be recorded so that they are senior to all instruments securing permanent financing. Every deed transferring the WFH Unit must reference the WFH Unit covenants citing where they are recorded in the land records by liber and folio. If the covenants cannot be recorded on the WFH Unit in conformance with this regulation, then the unit must not be considered as having met the requirements of Chapter 25B.
(c) The Developer must provide a copy of the recorded WFH Unit covenants to the purchaser at settlement. The purchaser must acknowledge in writing that they have been given a copy of the covenants.
6.5 Sales and Rental Documentation.
(a) Not less than 30 days prior to settlement, the Developer must submit to the Department the following information in correct form:
(1) A copy of the initial sales contract or agreement;
(2) A fair market appraisal of the unit;
(3) The purchaser’s Certificate of Eligibility;
(4) The WFH Unit Purchaser’s Agreement;
(5) Notice of liens in a format required by the Department and in accordance with state law; and
(6) The purchaser’s acknowledgment of receipt of covenants.
(b) In addition, within 15 days after the date of settlement, the Developer must submit to the Department the final settlement sheet and a copy of the two party deed. The deed transferring title must reference the recorded WFH Unit covenants by the date the covenants were recorded and their liber and folio.
(c) Within 15 days of the date of lease ratification for a WFH Unit rental unit, the Developer must submit to the Department the following information in correct form:
(1) A copy of the lease;
(2) The renter’s Certificate of Eligibility; and
(3) The WFH Unit Renter’s Agreement.