Community Housing Development Organizations (CHDOs)

CHDO Certification Description

TDHCA certifies CHDOs in conjunction with funding applications proposing development, sponsorship, or ownership of a TDHCA HOME project utilizing the CHDO set-aside. TDHCA does not certify CHDOs for any other purpose.

Fifteen percent of the HOME funds allocated to every PJ (a participating jurisdiction - city, county, multi-jurisdictional consortium, or state) are set aside for projects owned, developed, or sponsored by CHDOs. The 15 percent CHDO set aside is Congress's explicit effort to direct HOME program funds into the hands of nonprofit developers.

What is a CHDO?

To qualify for certification as a CHDO, the organization must demonstrate that they meet the definition of a CHDO from the HOME Final Rule at 24 CFR 92.2, which includes the following key requirements:

• Organized as a private nonprofit under State or local laws;
• Holds a 501(c)(3) or 501(c)(4) IRS tax exemption or be a subordinate of an eligible organization;
• Not controlled by, nor under the direction of, individuals or entities seeking to derive profit or gain from the organization.
• Not a governmental entity, and not controlled by a governmental entity;
• Has standards of financial accountability that conform to 2 CFR 200.302, ‘Financial Management’ and 2 CFR 200.303, ‘Internal Controls;’
• Has among its purposes the provision of decent housing that is affordable to low-income and moderate-income persons, as evidenced in its charter, articles of incorporation, resolutions or by-laws;
• Maintains accountability to low-income community residents;
• Demonstrates capacity for carrying out housing projects assisted with HOME funds; and
• Has a history of serving the community within which housing to be assisted with HOME funds is to be located.

TDHCA publishes a CHDO Certification Application that is utilized to confirm the organization’s CHDO status when funding is made available under the CHDO set-aside.

Are there requirements for community participation in CHDOs?

The CHDO must have a formal process for involving potential and actual low-income HOME program beneficiaries in the design, siting, and development of CHDO programs and projects. The more complex standards involve low-income accountability: no less than one-third of the CHDO's governing board must be residents of low-income neighborhoods (defined as at least 51 percent of households with incomes below 80 percent or median), low-income residents of the CHDO's target area, or elected representatives of low-income neighborhood organizations. The required board structure may necessitate restructuring or the creation of eligible subsidiaries plus, for CHDO projects, the establishment of project-specific advisory committees.

CHDO Resources

HUD HOME CHDO Topic Page (HUD Exchange)

Community-based nonprofits seeking free legal advice from experienced attorneys should visit www.trla.org.

For more information about the Multifamily Rental Development CHDO set-aside, please contact Connor Jones at connor.jones@tdhca.texas.gov.

For more information and the Single Family Development Homeownership CHDO set-aside, please contact Abigail Versyp at abigail.versyp@tdhca.texas.gov.