2022 HOME CHDO PROGRAM APPLICATION CYCLE
Community Housing Development Organizations
The National Affordable Housing Act of 1990 (the Act) created the HOME Investment Partnerships Program (HOME). The Act’s objectives include promoting partnerships between states, local governments, and nonprofit organizations. A “community housing development organization” (CHDO) is a specific kind of community based nonprofit housing organization defined by the HOME Final Rule (24 CFR Part 92). CHDOs have a distinct and special status within HOME. Each Participating Jurisdiction (PJ) must set-aside at least 15% of its total HOME award each year specifically for projects that will be owned, developed, or sponsored by CHDOs.
At a high level, the CHDO definition can be grouped into four key elements. To be recognized as a CHDO, an organization must be:
- A legally incorporated tax-exempt nonprofit organization;
- An independent organization free of undue control by for-profit or governmental entities;
- Accountable to the low-income community it serves; and
- Capable of undertaking the development of affordable housing.
The evaluation of whether an organization can be designated as a CHDO always takes place in the context of awarding funds from the CHDO set-aside—that is, in consideration of a housing project that is being or is likely to be funded. The Rule requires that a PJ certify that an organization meets the CHDO definition “each time it commits funds to the organization.”
The evaluation of an organization’s capacity, in particular, is closely connected to the organization’s role as an “owner,” “developer,” or “sponsor” of affordable housing. Those terms are carefully defined in the HOME regulation at §92.300(a)(2)-(6) and require that the CHDO be solely in charge of the project.
Cobb County has developed these guidelines for the State’s CHDO program based on the 2013 HOME Final Rule. Prior to providing funding to an organization from the CHDO set-aside, Cobb County must first determine that the organization meets the CHDO definition and that it will own, develop or sponsor HOME-assisted housing.
RECENT CHANGES TO THE HOME RULES THAT IMPACT CHDO CERTIFICATIONS
In 2013, HUD published a significant update to the HOME Final Rule, which substantially revised the treatment of CHDOs within HOME.
- The new HOME rules require that the state certify that an organization (even a previously state-certified CHDO) meets the CHDO definition at §92.2 each time it awards project funding or operating assistance to the organization. Consequently, an organization can only be a state-certified CHDO if it is applying for HOME funds for a specific eligible activity or project.
- In the past, Cobb County certified CHDOs on a yearly basis. Certification of a prospective CHDO will be incorporated into the application process for the HOME Program.
- To qualify as a certified CHDO, the organization must qualify as the owner, developer, or sponsor of the project for which it is applying. The amended HOME Final Rule, at §92.300, has significantly revised these definitions.
- An organization will only be certified by Cobb County as a CHDO if it demonstrates staff capacity appropriate to the proposed project. For example, if prior experience is in building and selling single family homes, the applicant likely will not be certified as a CHDO to develop rental housing.
The amended HOME rules have a significant impact on Applicants applying for the Affordable HOME Program:
For 2021, Cobb County will evaluate whether an organization appears to meet all applicable requirements for CHDO designation; only organizations receiving a preliminary CHDO designation will be processed under the HOME CHDO set-aside. At or immediately prior to Cobb County’s issuance of a binding HOME commitment, the organization will be required to certify to Cobb County that no material changes in its organizational structure or project plan have occurred and may be required, at Cobb County’s discretion, to submit updated attachments to this application (e.g. current board roster) to demonstrate that it continues to meet all CHDO requirements.
- For the 2021 application round, a certified CHDO will be considered a sponsor as defined in §92.300(a)(4). Applicants should carefully review the requirements for the CHDO-sponsored project in Section 2 below when prepping their application.
- In a limited partnership (LP), the CHDO or its wholly-owned subsidiary must be the sole general partner. In a limited liability company (LLC), the CHDO or its wholly-owned subsidiary must be the sole managing member.
- Further, if the LP or LLC agreement permits the CHDO to be removed as a sole general partner or sole managing member, the agreement must provide that the removal must be for cause and that the CHDO must be replaced with another CHDO.
This funding application is for the period beginning January 1, 2021, through December 31, 2021. Annually, the Cobb County CDBG Program Office requests proposals from local non-profit organizations and government entities to carry out eligible HOME activities in the County. Submission of an application does not guarantee funding. Costs associated with the preparation of this application shall be the responsibility of the Applicant. Applications will become the property of Cobb County.
A Selection Committee will review all applications for compliance with requirements and make funding recommendations to the Chairman and Cobb County Board of Commissioners (BOC). Recommendations for grant awards will be provided to the Chairman and BOC during the month of November 2020.
Eligible activities for the HOME Program consists of the following:
- Homeowner Rehabilitation (repair, rehabilitation, and reconstruction)
- Homebuyer Activities (acquisition, rehabilitation, new construction, down-payment assistance)
- Rental Housing (acquisition, rehabilitation, new construction)
- Tenant Based Rental Assistance (monthly rental assistance, security & utility deposits)
HOME MAXIMUM HOUSEHOLD INCOME LIMITS
|Household||Extremely Low 30%||Very Low Income 50%||Moderate Income 60%||Low Income|
*Income of all persons living in the household
Source: U. S. Department of Housing and Urban Development (HUD) www.huduser.gov