The HOME Program and CHDOs
By Jamie Ross
1000 Friends of Florida, Inc.
The Cranston-Gonzalez 1990 National Affordable Housing Act created, among other
things, the HOME Investment Partnership Act, commonly referred to as the HOME program.
The purpose of the HOME program is to expand the supply of affordable housing through
the acquisition, rehabilitation, new construction, and tenant-based rental assistance.
The primary emphasis in the HOME program is for rental housing for very low and
low income Americans. HOME monies can be used for loans or grants.
The HOME program provides approximately 55 million dollars ($55,000,000.00) for
affordable housing to Florida every year. The federal government distributes these
monies through an allocation formula to local governments known as PJs, (participating
jurisdictions) and to the State of Florida, which is itself considered a PJs The
largest portion of HOME monies are distributed to local government participating
jurisdictions. These are generally the same larger entitlement communities that
are also eligible for such programs as Community Development Block Grants. The balance
is received by the state through the Florida Housing Finance Agency. The state's
program is approximately sixteen million ($16,000,000.00) annually.
SET-ASIDE FOR A CERTAIN TYPE OF NON-PROFIT
Both the local government and the state's HOME monies contain a fifteen percent
set aside for Community Housing Development Organizations (CHDOs). CHDOs
are eligible to apply for all HOME monies, but only CHDOs are eligible to apply
for the CHDO set-aside. This creates a tremendous funding opportunity for those
who qualify as CHDOs.
WHAT MAKES AN ORGANIZATION A CHDO
The following highlights are the more substantive elements of what qualifies an
organization to be a CHDO. The complete statutory checklist for a CHDO is found
in 24 CFR Part 92.2 which includes matters such as financial accounting requirements,
rules governing for-profit sponsored organizations, and CHDOs chartered by state
or local government:
An existing nonprofit such as a Community Development Corporation (CDC) can qualify
as a CHDO if it meets the requirements set forth on the statutory checklist. A CDC
will most likely meet or exceed the board composition requirement. The cornerstones
of a bona fide CHDO is community input and control. A CHDO can be the owner, developer,
sponsor, or combination of owner, developer, and sponsor of the affordable housing
project. A CHDO can not be a religious organization, although a religious parent
organization may establish a secular organization that could qualify as a CHDO.
A CHDO must be a nonprofit organization, either 501(c)(3), or (4). No part of its
earnings may inure to the benefit of any member, founder, contributor, or individual.
The CHDO may also be a subordinate organization of a central organization nonprofit
under section 905 of the Internal Revenue Code. If the CHDO is sponsored or created
by a for-profit entity, the for-profit entity may not appoint more than one-third
of the membership of the CHDO's governing body, and the board members appointed
by the for-profit entity may not, in turn, appoint the remaining two-thirds of the
It must have among its purposes the provision of decent housing that is affordable
to low-and moderate-income people. This statement of purpose may be evidenced in
the organization's charter, articles of incorporation, by-laws, or board resolutions.
The organization must have a demonstrated capacity for carrying out activities assisted
with HOME funds. An organization may satisfy this requirement by having an experienced
staff or by contracting with an experienced consultant with a plan for that consultant
to train key staff members in the undertakings contemplated in the HOME project.
The organization must have a history of serving the community where housing to be
assisted with HOME funds will be used. This can be satisfied by a statement that
documents at least one year of experience in serving the community, or for a newly
created organization formed by local churches, service or community organizations,
a statement that documents that its parent organization has at least one year of
experience in serving the community. This service can be such things as developing
new housing, rehabilitating housing, managing housing, or delivering nonhousing
services to the community such as counseling, food services, or child care facilities.
The organization must maintain at least one-third of its governing board's membership
for residents of low-income neighborhoods, Other low-income community residents,
or elected representatives of low-income neighborhood organizations. Under the HOME
program, for urban areas, the term "community" is defined as one or several
neighborhoods, a city, county, or metropolitan area. For rural areas, "community"
is defined as one or several neighborhoods, a town, Village, county, or multi-county
area (but not the whole state).
The organization must provide a formal process for low-income program beneficiaries
to advise the organization in all of its decisions regarding the design, siting,
development, and management of all HOME assisted affordable housing projects. This
provision for accountability to the low- income community, entails, at a minimum,
a written procedure adopted by the board for obtaining input from the community
regarding the delivery of housing whenever HOME funds are used.
HOW A CHDO ACCESSES HOME FUNDS
An organization located within a PJ makes application directly to the PJ (local
government) for certification as a CHDO, Each local government PJ has a HOME program
administrator, usually found in the local government's community development division.
The local HOME administrator can inform a CHDO "want-to-be" about local
HOME program uses, requirements, and NOFAS, and the process for Iocal certification
of a CHDO.
Organizations not located in a PJ apply for certification to be a CHDO within the
application process for HOME funding from the state. The organization provides evidence
to the Florida Housing Finance Agency that it complies with all the items in the
statutory checklist and submits its application as a CHDO at the time it makes application
for HOME funding from the state. If the application is successful and the state
determines that the organization meets the requirements in the checklist, it receives
its HOME loan/grant and its HOME CHDO certification at the same time. The state
will not, however, certify an organization as a CHDO if it is not already a HOME
funding recipient. The state has two HOME program cycles each year, one for homeownership
and one for rental.
CHDOs located in PJs will most likely seek HOME funding from the PJ, in other words,
the local government. CHDOs not located in a PJ will most likely seek HOME funds
from the state. Each local government participating jurisdiction and the state have
their own strategies for expending HOME monies. Their strategies are designed pursuant
to the consolidated planning process which every participating jurisdiction, including
the state is requited to do for participation in the HOME program. CHDOs within
a local PJ should participate in the planning process in their local government
and should make it their business to be knowledgeable about the permitted uses of
HOME funds and the process for obtaining HOME funds within their local government.
PARTNERSHIP IS KEY
Every participating jurisdiction is charged under the HOME program to make all reasonable
effort to maximize participation by the private sector, including nonprofit and
for-profit entities, in the implementation of the jurisdiction's approved consolidated
plan, including participation in the financing, development, rehabilitation, and
management of affordable housing.
It is important for all CHDOs to remember that the status of a CHDO is not enough
to obtain CHDO set-aside funds. Whether a CHDO is successful in accessing funds
will be a function of the merits of its proposed project, project feasibility, ability
to proceed, and the strength of its partnership in and with the participating jurisdiction.
The strength of the partnership between the local government participating jurisdiction
and the CHDO has a great deal to do with communication and respect. Any organization
seeking CHDO status should meet with the HOME administrator in the jurisdiction
about the organization's plans before proceeding down the CHDO path.
The local government participating jurisdiction also has the ability to obtain free
technical assistance for the CHDO. Technical assistance for CHDOs is provided by
the Department of Housing and Urban Development (HUD) through contracts with a variety
of national and statewide technical assistance organizations. CHDO direct one-on-one
technical assistance for CHDOs in urban areas of Florida is contracted to the Enterprise
Foundation with a subcontract to the Florida Housing Coalition; rural areas are
contracted to the Housing Assistance Council, and workshops with associated direct
assistance are contracted to Development Training Institute. Accessing this technical
assistance requires designation from the local participating jurisdiction.
For more information about the federal HOME program or technical assistance under
the program contact Linda Dresdner, Technical Assistance Coordinator for HUD at
(904) 232-1202. For information about the State HOME program contact Angela Hatcher,
Florida Housing Finance Agency HOME program administrator, at (904) 488-4197.
The rules which govern the HOME program are found in Tides I and 11 of the Cranston-Gonzales
National Affordable Housing Act, Volume 24 of the Code of Federal Regulations (24
CFR. Part 92.) State statutes and rules which govern the state HOME program are
found in Section 420.5089 of the Florida Statutes, and Rule 91,34, Florida Administrative