Community Housing Development Organization (CHDO)
A CHDO is a special type of non-profit housing developer that is accountable to the low-income communities they serve. Because non-profits are active affordable housing developers, the Department is encouraging non-profits to qualify as a CHDO and for all CHDOs to take advantage of capacity building opportunities for investment in affordable housing development as an Owner, Sponsor, or Developer. Your organization may qualify as a CHDO and receive funding through a 15% set-aside in Home Investment Partnerships (HOME) Program funding. To qualify for a CHDO the following will apply:
- Must provide decent housing that is affordable to lower and moderate-income persons.
- Must be community-based and have one-third of low-income representation on its Board.
- A CHDO may be created by a public body provided that the non-profit is not controlled by the public body.
- A CHDO must meet the definitional requirement to maintain "accountability to low-income community residents.
- A CHDO must have a "demonstrated capacity for carrying out housing development related activities.
- A CHDO must have a history of servicing the local community for at least one year before funds are committed. However, this requirement may be met by new organizations that are formed by existing organizations with a history of servicing the community.
- Effective September 1, 2005, a CHDO must maintain a minimum of five (5) board members and conduct a minimum of one (1) meeting per quarter. Minutes of said meeting must be provided upon request.
CHDO as "Owner"
The CHDO is an "owner" when it holds a valid legal title to or has a long term (99 year minimum) leasehold interest in a property. The CHDO may be an owner with one or more individuals, corporations, partnerships or other legal entities. If it owns the project in partnership, it or its wholly owned nonprofit or for-profit subsidiary must be the managing general partner with effective control (i.e. decision making authority) of the project.
The CHDO may be both Owner and Developer, or may have another entity as the Developer.
CHDO as "Sponsor"
The CHDO must always own the project prior to the development of the project. The CHDO may develop a project that is solely or partially owned and agrees to convey ownership to a second non-profit organization at a predetermined time prior to or during development or upon completion of the development of the project. The second non-profit must be selected prior to the commitment of HOME funds, and will assume the HOME obligation (including any repayment of funds) for a specified time. If the property is not transferred to the second non-profit, the CHDO sponsor remains liable for the HOME loan. The second non-profit must be financially and legally separate from the CHDO sponsor. The CHDO sponsor must provide sufficient resources to the second non-profit organization to ensure the development and long term operation of the project.
CHDO as "Developer"
The CHDO must (1) either own a property and develop a project or have a contractual obligation to a property owner to develop a project and (2) perform all the functions typically expected of for-profit developers and reasonably assume all the risks and rewards associated with being the project developer. For additional information, call 305.416.2084, Alberto Castellon, Housing Development Coordinator.
CHDO Checklist (HUD.gov)
Frequently Asked Questions
- What does CHDO stand for and how does one get funded?
CHDO is the acronym for Community Housing Development Organization (CHDO) is a particular type of non-profit that develops affordable housing. The requirements for a CHDO are set forth in 24 CFR part 92 through the Home Investment Partnerships (HOME) Program Final Rule. HOME funding is provided on an annual basis by U.S. HUD to the City of Miami who in turn funds both non-profits, CHDOs and for profit developers. For more information regarding CHDO requirements see the attached CHDO Checklist Table.
- How long will it take for the City to certify my organization as a CHDO?
The review is based on the CHDO submission packet (required documents listed in the CHDO Checklist Table. If the packet contains all materials as required, the review can be completed within thirty (30 days).
- What is the benefit in being certified as a CHDO?
There are several benefits in being certified as a CHDO. The HOME Program funding allows for a 15% set aside for CHDOs so competition for HOME funding can be lessened. Staff can benefit from technical assistance and capacity building opportunities provided by the Department or by U.S. HUD. In addition, a private developer may be interested in a joint venture or a managing general partner agreement in order to leverage HOME funding and assist the City in its efforts for building capacity of CHDO
- If certified as a CHDO, why is there a re-certification?
A re-certification must be conducted annually to ensure that the CHDO is still practicing business as required. For example, that the Board representation is still in place as was reported at the time the CHDO was certified. In addition, the Department is required to provide evidence of re-certification to U.S. HUD on an annual basis.
- What are the Department's overall expectations/requirements of a CHDO?
Overall expectations/requirements include demonstrating that the CHDO is improving in its overall project development plans; participating in the CHDO capacity building opportunities; providing reporting information and attending meetings that may be requested to assess the CHDO's capacity building.