HOMEfires - Vol. 4 No. 1, April 2002

Q: How often must a PJ requalify a non-profit organization as a Community Housing Development Organization (CHDO)?

A: HUD strongly recommends recertification of CHDOs annually. However, at a minimum, a participating jurisdiction (PJ) must requalify an organization as a CHDO each time it receives additional set-aside or operating funds.

As stated in the HOME regulations (§ 92.300 (a)(1)), PJs are required to reserve not less than 15% of their HOME allocation for investment in housing to be developed, sponsored or owned by CHDOs. A CHDO is a special type of non-profit organization that meet the following requirements:

• Has a governing board consisting of not less than one-third low-income persons and not more than one-third public officials.
  
• Has a 503(c)(3) or (c)(4) ruling from the IRS.
  
• Has demonstrated a capacity for carrying out activities assisted with HOME funds.
  
• Has a history of serving the community in which the HOME assisted housing is to be located for a minimum of one year.
  
• 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.

PJs must identify non-profit organizations and certify these organizations as CHDOs using the guidance given in CPD notice 97-11, Guidance on Community Housing Development Organizations (CHDOs) under the HOME Program, as may be updated.

Non-profit organizations may experience transitions in board composition and management. Charters or by-laws may be amended at any given time. Therefore, after the initial certification, it is not adequate to assume a certified CHDO remains a CHDO. HUD will monitor a PJ's files to ensure that CHDO designations are being updated as required.