“Come Home to Howard County … And Make Your Dream a Reality"

HOWARD COUNTY HOUSING

MODERATE INCOME HOUSING UNIT (MIHU) PROGRAM

Frequently Asked Questions (F.A.Q.s) and "Top Ten Myths"

I. FAQs:

• What is “MIHU?”

The Moderate Income Housing Unit (“MIHU”) Program is an inclusionary zoning program that requires developers of new housing in certain zoning districts to sell or rent a certain percentage (generally 10% - 15%) of the dwelling units built in a community to households of moderate income at affordable prices and rents.

MIHUs are sold or rented through the County’s housing agency, Howard County Housing (“HCH”), according to procedures and standards set forth in the MIHU Law (Section 13.400 et seq. of the Howard County Code) and regulations established under it.

• In what zones are MIHUs required?

MIHUs are required to be built and sold or rented in the R-SA-8, R-A-15, CCT, POR, R-SI, TOD, and CAC zones, as well as in certain mixed use communities, age-restricted adult housing developments, planned senior communities, and residential mobile home developments.

• What is a “household of moderate income?”

A household of moderate income is one whose household income does not exceed 80% of the Howard County median income for purchasers and 60% of the Howard County median income for renters. Currently, the maximum incomes for the program are as follows:

• What types of dwelling units are available for purchase or rent?

All types of dwelling units may be are available for purchase or rent, from apartment-style dwellings or condominiums to townhouses to single-family detached dwellings. The base house sizes for MIHUs are as follows:

• What is the purchase price of an MIHU?

The purchase price for each type of MIHU is set according to an affordability formula established in the MIHU law. MIHU prices are set twice a year. The current base prices are:

The actual MIHU prices may be greater for MIHU dwellings with larger floor plans or added amenities.

• What is the rental rate of an MIHU?

The maximum rents for rental MIHU units are as follows:

• How do I buy or rent an MIHU?

If you are interested in buying or renting an MIHU, you must apply to HCH to be placed on a waiting list. Applications for the waiting lists are accepted four times a year - generally in January, April, July, and October.

As MIHU dwellings become available for sale or rent, DHCD will select names from the waiting lists. For those units offered for sale, priority points will be assigned to each applicant who:

- is a first-time homebuyer;

- lives and works in Howard County;

- works, but does not live, in Howard County;

- lives, but does not work, in Howard County;

- is employed by Howard County government, Howard County schools, the Howard County library, Howard Community College, the Howard County Economic Development Authority, the Howard County Health Department, Howard County Socail Services, or certain non-profit entities.

- has been displaced from a mobile home park on Route 1;

- participates in the federal Family Self Sufficiency Program in Howard County;

- has an income within the lowest qualifying range; and

- has been on the waiting list for one year or more.

For for-sale units, eligible applicants with the most priority points will be pre-qualified for mortgage financing and placed in a lottery drawing. Applicants selected from the lottery will be given the opportunity to enter into a contract of sale with the owner of the housing development.

For rental units, eligible applicants will be selected on a first-come, first-serve basis. Selected applicants will be given the opportunity to enter into a lease with the owner of the housing development.

• If I buy an MIHU, what are my rights and obligations?

Once you purchase an MIHU dwelling, you own it outright, with all of the rights and responsibilities of a homeowner. However, to ensure that MIHUs serve only eligible households and remain affordable to future homebuyers, certain restrictions are placed on the dwelling. They are:

1) You and your household must occupy the MIHU dwelling as your primary residence.

2) If you decide to sell the MIHU dwelling, you must first offer it for sale through DHCD to a moderate income household at the affordable MIHU price determined by DHCD.

• How do I apply?

Applications can be obtained from DHCD at 6751 Columbia Gateway Drive, Columbia, Maryland 21046, by calling us at 410-313-6318, or online at www.howardcountymd.gov.

II. TOP TEN MYTHS ABOUT MIHUs:

 Myth # 1: MIHUs are “public housing.”

Fact: The government neither owns nor funds MIHU units. For-sale MIHUs are sold directly from the developer/builder to the homebuyer. Rental MIHUs are leased by the apartment owner directly to the renter. Prices and rents are set by law. Howard County government does not subsidize MIHU sales prices or rents; it merely administers the program to ensure that these affordable housing opportunities are made available to eligible persons in accordance with the law.

 Myth #2: MIHUs only benefit those with low income.

Fact: The MIHU program is designed to benefit households of moderate income – generally between $45,000 and $75,000 for a family of four seeking to purchase, and between $37,000 and $56,000 for a family of four seeking to rent. These applicants include service and government workers, teachers, college graduates, and retired persons. Persons with incomes below these ranges will not be able to afford to buy or rent an MIHU.

 Myth #3: MIHUs are undesirable because they are poorly designed, cheaply built, and segregated from the neighborhood.

Fact: MIHUs are interspersed and integrated within each development. MIHUs must be built to high quality standards and are often indistinguishable from market rate homes.

 Myth #4: As an owner or renter of an MIHU, I will not get access to community amenities.

Fact: MIHU owners and renters enjoy all of the same amenities – clubhouse, swimming pool, fitness room, etc. – as are available to any other resident of the community.

 Myth #5: I can buy an MIHU even though my credit score is poor and I have no money for settlement costs.

Fact: Applicants who wish to buy an MIHU must be able to qualify for a mortgage, including a satisfactory credit report, and pay all downpayment and settlement costs, which can amount to $15,000 or more.

 Myth #6: After I buy or rent an MIHU, if my income goes up, I will have to move out.

Fact: An MIHU buyer or renter must be income-eligible only at the time of selection to purchase or rent. If an income-eligible person’s income increases, he or she may stay in the home.

 Myth #7: After I buy an MIHU, I can sell it at the market price for a huge profit.

Fact: Each MIHU is governed by restrictive covenants that limit the price at which it can be resold and require that it be offered to another moderate income family through HCH.

 Myth #8: Because the price is perpetually controlled, there is no benefit to buying an MIHU; I might as well rent.

Fact: There are several benefits to owning an MIHU over renting. As the MIHU control price increases, so does your equity in the home. You also build equity as you pay down your mortgage. This means you have an asset that can be sold or borrowed against. In addition, unlike renters, you will be able to deduct the interest on your mortgage payments from your income taxes. Moreover, you will have had the opportunity to enjoy the “pride of ownership” of your very own home.

 Myth #9: If I don’t have the maximum number of priority points, I don’t have a chance to win the MIHU Lottery.

Fact: A person need not have the maximum possible number of priority points to be entered in an MIHU Lottery. Starting with those with the most points, HCH pulls names from the waiting list that are at least four times the number of MIHUs offered for sale. If any of the applicants pulled have inadequate credit scores, replacement names are taken from the list. Consequently, it is often the case that applicants with a lesser number of priority points will make it to the “lottery pool.”

 Myth #9A: If I do have the maximum number of priority points, I am a shoo-in to make it into the lottery.

Fact: Priority points are not the only factor used in qualifying you for the MIHU lottery. You must also have satisfactory credit, sufficient income, and adequate assets to be able to qualify for and afford a mortgage and pay all downpayment and settlement costs.

 Myth #10: I’ll have to complete a new MIHU application every enrollment period or every year to qualify.

Fact: Once a person’s application is submitted, it will go onto the waiting list permanently. Your application does not expire; it is removed from our list only if you win a lottery. However, we ask that you update your application whenever your profile (annual income, household size, etc.) changes.