First Time Homebuyer

To participate in the Affordable Housing Purchase Program, an applicant and all the members of their household must not currently own a home and, must not have owned a home anywhere in the past five (5) years.  

Household income within a certain range

Income is defined as gross income (before taxes) received annually from all sources by all wage earners in a household.  Sources of income include (but are not limited to): wages and salary, overtime pay, child support, alimony, interest income from savings and checking accounts, dividends from stocks and bonds, and interest from certificates of deposit, Social Security benefits, Veterans Administration benefits, unemployment insurance benefits, bonus payments, pension and retirement payments, long-term disability benefits, and any other annuities or stipends received. The maximum income numbers change annually, usually by July 1, and are based on household size. 

Qualify for Financing

Applicants for the Affordable Housing Purchase Program must provide a mortgage pre-qualification letter for at least $150,000. The Affordable Housing Purchase (AHP) Program  does not provide financing. The Affordable Housing Purchase Program does not have any restrictions on how the property can be financed or how much money the buyer can be given by family members.  The buyer, however, should check with their lender to see if the lender has any limits or restrictions on gifts.  If a gift is provided, the donor may not be listed on the deed.

Residency/Employment Requirement

Eligible applicants must live or work in Montgomery County. Applicants who live or work within the City of Gaithersburg will be prioritized.

Demonstrate ability to pay

Applicants must document that they can afford the mortgage loan amount, utilities, and fees. 

Provide tax records

Federal Tax Returns: The 2 most recently filed Federal Income Tax Returns (Forms 1040 and W-2) for every wage earner, OR an IRS letter certifying no tax return was filed. (If an adult wage earner did not file an IRS tax return, that person must provide verification of not filing a tax return and indicate why). 

Household size appropriate to size of unit

The AHP Program specifies the property size (number of bedrooms) that a household of a particular size is eligible to purchase.

Homes purchased through the MPDU Program, whether new or re-sale, have controls on them.  The control period is a set period of time beginning on the settlement date of the first sale of the MPDU. For the City of Gaithersburg, the control period is 30-years from the time of the first sale. For Re-Sale units, the control period does not restart. The controls are in the form of a restrictive covenant.

During the Control Period:

• The owner must certify that they will occupy the unit as their primary residence during the control period.
• The owner must not refinance the property for more than the controlled resale price established by the City’s Housing & Community Development (HCD) office (owners are prohibited from refinancing the property based on the market value of the property).
• The owner can only sell their MPDU/WFHU at the established controlled resale price and through the City’s AHP Program process.
• MPDU/WFHU owners must not purchase another residential property anywhere.

After the control period expires:

• It is strongly recommended that the affordable unit owner(s) contact the City Housing & Community Development (HCD) office prior to any refinancing.  Refinancing does not relieve the owner of the obligation to make a shared profit payment to the City upon sale; therefore, it is important not to refinance for the full market value. The HCD office can provide an estimate of the shared profit payment that would be owed to the County.
• When the affordable unit is sold after the control period, the owner may sell the unit at a market price and work with the HCD Office to pay 50% of the excess profit to the City of Gaithersburg. 

Anyone interested in applying to the Affordable Housing Purchase Program must complete two required online educational trainings:

• First-Time Homebuyer Class
• MPDU Orientation Seminar

The primary applicant must attend both classes. Other household members are encouraged to attend as well.

• Find more information on the trainings on the Montgomery County webpage.  

The HCD office only reviews applications submitted via mail, drop-off at City Hall (31 S. Summit Ave.), or upload documents to the online portal here. Applicants will receive an email confirmation indicating the time frame on when their application will be reviewed. Applicants that have not taken the required training need to refer to the topic “Required Training".

The HCD staff will review the required documents submitted with the application and verify that applicant has uploaded any additional supporting document that is applicable to their household. The following is a list that needs to be reviewed with a special attention to expedite the reviewing and approval of the certificate. (All documents should be uploaded to the AHP Program confidential online Application link as pdfs, jpgs, jpegs or pngs).

• Affordable Housing Purchase Program application.

• Government issued Identification, such as driver’s license, state ID or passport for primary applicants.
  
  
• County MPDU Orientation Certificate
  
  
• First-Time Homebuyer Class Certificate issued within the past two years.
  
  
• Mortgage pre-qualification letter with a pre-qualified amount of no less than $150,000 and issued within the last three months. (View a sample)
  
  
• Federal Tax Return: The most recently filed Federal Income Tax Return(s) (Forms 1040 and W-2) for every wage earner or IRS letter certifying no tax return was filed.  The preferred format for submitting a tax return document is PDF. However, if you are taking a picture; only upload page 1 and page 2 of your Federal Tax Return and each W-2 form. (View a sample)
  
  
• Self -prepared taxes are not acceptable. Obtain a Tax Return Transcript and all other tax-related transcripts at no cost from the Internal Revenue Service (IRS) at https://www.irs.gov/individuals/get-transcript or call 800-908-9946. (View sample)
• If you are self-employed and filled out a 1040 with form(s) 1099 Miscellaneous, 1099 NEC or a Scheduled C- Profit and Loss, see samples of the document pages that must be provided.
  
  
• Proof of Income: Two (2) most recent pay stubs (or 4 pay stubs if paid weekly) for every wage earner in the household and from each current employment. (View sample)
• If unable to provide pay stubs because you have new employment or current employer does not supply with pay stubs, please print a Verification of Income form (PDF). Bank statements are not acceptable.
• If self-employed, a notarized Year to Date Statement of Income and Expenses (this statement must be from current year starting from January to present), and a copy of Schedule C from your federal income tax return. (View sample)
• If retired, proof of pension income and/or social security income. (View sample)
• Proof of all other sources of income such as Social Security Income (SSI), Child support or Alimony. Provide statements from the agency issuing this income. Bank statements are not acceptable.
• Proof of Residence: If your current taxes do not show your current address, provide copy of any two of the following: current rental lease, utility bill, and or driver’s license showing new address.
• Other documents for special situations (only if applicable to your household):
• Divorce or separation agreements (if applicable or if the most recent tax return was filed as “married”).
• If you have a newborn child who was not listed on your recent tax return, provide a copy of the child’s birth certificate.
• If you have an adult child or relative, such as a parent, that you are claiming on your taxes as your dependent, you must provide a Verification of Non-Filing Taxes (Form 4506-T) for each listed dependent. Obtain this form and all other tax-related transcripts at no cost from the Internal Revenue Service (IRS) at www.irs.gov/individuals/get-transcript or call 800-908-9946. (View sample).

If a submitted application is not complete, the applicant will receive an e-mail indicating which documents were missing.  The applicant should then upload the missing documents within 1 week. Failure to do so may disqualify the applicant.

When everything is submitted correctly, the applicant will receive an e-mail indicating when their application will be reviewed. The HCD office may take up to 3 weeks for this process. The reviewing time frame changes to 30 days or more if the application is not submitted correctly.

Please do not call if your application is less than 30 days outstanding or if you recently uploaded a missing document requested by the HCD staff.  

If an applicant is deemed eligible after review of their application, staff will then issue a Certificate of Eligibility that enables the applicant to enter the selection process for any available affordable housing they wish to purchase. 

The HCD office only reviews applications submitted via mail, drop-off at City Hall (31 S. Summit Ave.), or Applicants will receive an email confirmation indicating the time frame on when their application will be reviewed. Applicants that have not taken the required training need to refer to the topic “Required Training".

The HCD staff will review the required documents submitted with the application and verify that applicant has uploaded any additional supporting document that is applicable to their household. The following is a list that needs to be reviewed with a special attention to expedite the reviewing and approval of the certificate. (All documents should be uploaded to the AHP Program confidential online Application link as pdfs, jpgs, jpegs or pngs).

• Affordable Housing Purchase Program application.

• Government issued Identification, such as driver’s license, state ID or passport for primary applicants.
  
  
• County MPDU Orientation Certificate
  
  
• First-Time Homebuyer Class Certificate issued within the past two years. Mortgage pre-qualification letter with a pre-qualified amount of no less than $150,000 and issued within the last three months. (View sample)
  
  
• Federal Tax Return: The most recently filed Federal Income Tax Return(s) (Forms 1040 and W-2) for every wage earner or IRS letter certifying no tax return was filed.  The preferred format for submitting a tax return document is PDF. However, if you are taking a picture; only upload page 1 and page 2 of your Federal Tax Return and each W-2 form. (View sample)
  
  
• Self -prepared taxes are not acceptable. Obtain a Tax Return Transcript and all other tax-related transcripts at no cost from the Internal Revenue Service (IRS) at https://www.irs.gov/individuals/get-transcript or call 800-908-9946. (View sample)
• If you are self-employed and filled out a 1040 with form(s) 1099 Miscellaneous, 1099 NEC or a Scheduled C- Profit and Loss, see samples of the document pages that must be provided.
  
  
• Proof of Income: Two (2) most recent pay stubs (or 4 pay stubs if paid weekly) for every wage earner in the household and from each current employment. (View sample)
  
  
• If unable to provide pay stubs because you have new employment or current employer does not supply with pay stubs, please print a Verification of Income form. Bank statements are not acceptable.
• If self-employed, a notarized Year to Date Statement of Income and Expenses (this statement must be from current year starting from January to present), and a copy of Schedule C from your federal income tax return. (View sample)
• If retired, proof of pension income and/or social security income. (View sample)
• Proof of all other sources of income such as Social Security Income (SSI), Child support or Alimony. Provide statements from the agency issuing this income. Bank statements are not acceptable.
  
  
• Proof of Residence: If your current taxes do not show your current address, provide copy of any two of the following: current rental lease, utility bill, and or driver’s license showing new address.
  
  
• Other documents for special situations (only if applicable to your household):
  
  
• Divorce or separation agreements (if applicable or if the most recent tax return was filed as “married”).
• If you have a newborn child who was not listed on your recent tax return, provide a copy of the child’s birth certificate.
• If you have an adult child or relative, such as a parent, that you are claiming on your taxes as your dependent, you must provide a Verification of Non-Filing Taxes (Form 4506-T) for each listed dependent. Obtain this form and all other tax-related transcripts at no cost from the Internal Revenue Service (IRS) at www.irs.gov/individuals/get-transcript or call 800-908-9946. (View sample).

If a submitted application is not complete, the applicant will receive an e-mail indicating which documents were missing.  The applicant should then upload the missing documents within 1 week. Failure to do so may disqualify the applicant.

When everything is submitted correctly, the applicant will receive an e-mail indicating when their application will be reviewed. The HCD office may take up to 3 weeks for this process. The reviewing time frame changes to 30 days or more if the application is not submitted correctly. Please do not call if your application is less than 30 days outstanding or if you recently uploaded a missing document requested by the HCD staff.  

If an applicant is deemed eligible after review of their application, staff will then issue a Certificate of Eligibility that enables the applicant to enter the selection process for any available affordable housing they wish to purchase.