Selling an MPDU in Montgomery County: What You Keep

You bought a Moderately Priced Dwelling Unit years ago. Now you want to move, and you've just discovered that you can't simply list it, take the highest offer, and walk away with the equity. Montgomery County has rules — and they control both your resale price and, in some cases, half your profit.

This catches people off guard constantly. An MPDU owner in North Bethesda watches comparable townhomes trade at $525,000, runs the math on what that means for their next purchase, and then learns the county has capped their resale price at something far lower. The gap between those two numbers is the entire conversation.

Here's how the program actually works when you're on the selling side, what the county takes, and what you keep.

Selling an MPDU in Montgomery County during the control period

Every MPDU carries a control period — a fixed window that starts on the settlement date of the home's first sale. During that window, the county controls the resale price.

• 30 years for all new MPDUs and some resale homes
• 10 years for a small number of resale homes, and typically for units first purchased before April 1, 2005

If you're inside that window, three things are true at once.

You can't set your own price. The county calculates a Maximum Resale Price. It starts with the price you originally paid, adds an allowance for the increase in inflation measured from your purchase date forward, and adds a credit for allowable improvements. That's your ceiling — not the appraisal, not the comps, not what the neighbors got.

Your improvement credit is capped. The total credit you can claim for improvements during the control period is limited to 10% of your original MPDU purchase price. If you paid $200,000 and spent $60,000 on a kitchen and a finished basement, you're getting credit for $20,000 of it. The rest is a cost of living there, not an investment you recover at settlement.

The county gets first crack at the home. Any MPDU offered for resale during the control period must first be offered exclusively — for up to 60 days — to the Department of Housing and Community Affairs and then to the Housing Opportunities Commission. Only after that window closes without a purchase does the unit move to an eligible buyer through the MPDU program process.

Practically, that means your timeline runs longer than a conventional sale. If you're coordinating a purchase in Bethesda or Rockville on the other side of this, build that 60-day offer period into your plan before you write an offer on anything. This is exactly the kind of sequencing I map out with clients months in advance, because getting it wrong means either carrying two housing payments or scrambling for a short-term rental.

After the control period ends: the 50% excess profit split

Once the control period expires, you can sell at market price. But the county isn't finished — you owe 50% of the excess profit to Montgomery County at settlement.

Excess profit isn't simply your sale price minus what you paid. The county lets you deduct a stack of items first. Excess proceeds are the amount by which the resale price exceeds the sum of:

• Your original purchase price
• An allowance for the increase in the cost of living from your purchase date to settlement
• An allowance for capital improvements made to the unit
• The actual brokerage fee — a credit available only if both buyer and seller use licensed, third-party real estate agents

That last bullet matters more than it looks. Selling without an agent to save the commission doesn't save you anything here, because the commission is deductible from the excess profit calculation. You give up representation and the county's share goes up. It's one of the few situations in real estate where the math is unambiguous.

The county publishes a worked example that shows how this lands. Using their figures:

• Original purchase price: $65,000
• Cost-of-living (CPI) allowance: $36,400
• Capital improvements: $5,000
• Real estate commission: $12,000
• Additional allowable costs: $2,200
• Adjusted MPDU price: $120,600

Sell that home for $200,000 and the excess profit is $79,400. The county takes $39,700. You keep the other $39,700 — so your total proceeds before closing costs come to $160,300, not $200,000.

Your CPI allowance will look nothing like that example. It scales with how long you've owned the home, and someone who bought in 2001 has a dramatically larger inflation allowance than someone who bought in 2019. Run your own numbers before you assume anything.

Once the county has received its share, it terminates the MPDU covenants and the home becomes an ordinary property. That's the moment the restriction genuinely ends.

What buyers should know about MPDU resales

If you're on the buying side, an MPDU resale is one of the few ways to purchase in Montgomery County meaningfully below market — but the same restrictions transfer to you.

You'll need to qualify through the county's program, which reviews household income and first-time buyer status. You'll be subject to owner-occupancy requirements, including the annual residency certifications DHCA began sending to control-period owners in 2025. And when you eventually sell, you inherit the resale price controls and the excess profit split.

An MPDU is a place to live at a price you can manage. It is not an appreciation play. Buyers who understand that going in tend to be satisfied years later. Buyers who expected market-rate equity growth are the ones who feel blindsided at the closing table.

Worth comparing against your alternatives: many buyers who qualify for MPDUs also qualify for first-time homebuyer programs in Montgomery County, which offer down payment help on unrestricted homes. Sometimes a market-rate townhome with assistance beats a restricted MPDU. Sometimes it doesn't. It depends on your income, your timeline, and how long you plan to stay.

Practical steps before you list

1. Find your control period end date. It's in your MPDU covenants, recorded against the property. Don't guess — a two-year error changes your entire strategy.
2. Request your resale price calculation from DHCA in writing. If you're inside the control period, this is the number you're selling at. Get it before you price anything.
3. Gather improvement receipts and permits. Unpermitted work generally won't count toward your improvement credit, and permit history matters in Montgomery County.
4. Add up your other closing costs. The county's share isn't the only deduction — Maryland transfer and recordation taxes still apply, and if your community has an association you'll need to handle HOA disclosure requirements like any other sale.
5. Build a real net sheet. Program restriction, taxes, commission, and loan payoff together produce your actual walk-away number. My guide to calculating net proceeds on a Bethesda home sale covers the standard deductions; layer the MPDU rules on top of it.

None of this makes selling an MPDU a bad outcome. You bought below market, you built equity in a county where that's difficult to do, and you're leaving with real money. The mistake isn't owning an MPDU — it's planning your next move around a number the county was never going to let you keep.

If you're an MPDU owner trying to figure out what you'd actually walk away with, or a buyer weighing a restricted unit against a market-rate home, I'm happy to run the numbers with you. Reach out anytime.

About Pey Behin

Pey Behin is a residential real estate agent serving the Washington, DC metro area, with a focus on Bethesda, Montgomery County, and Northern Virginia. He works with buyers and sellers who want clear strategy, data-driven pricing, and direct guidance throughout the transaction process.