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CHDO as a Developer

A CHDO is considered a developer when it either:

  • owns the property and develops the project
OR
  • has the contractual obligation to a property owner to develop a project

If the CHDO owns the property, it must obtain financing and rehabilitate or construct the project.
 

For HOME-assisted rental housing:
At project completion, the CHDO may maintain ownership and manage the project over the long term, or it may transfer the project to another entity for long-term ownership and management.


For HOME-assisted homebuyer projects:
The CHDO must transfers title of the property and the HOME obligations to an eligible homebuyer within a specified time frame of project completion.

If the CHDO does not own the property, it must be under a contractual obligation with the owner to obtain financing and rehabilitate or construct the project. Under this arrangement, the CHDO assumes all risks and rewards associated with being the project developer. A written agreement between the CHDO and the property owner must detail the CHDO's specific obligations.


For HOME-assisted rental housing:
The CHDO may manage the project for the owner at project completion


For homebuyer housing:
The owner must transfer title of the property and the HOME obligations to eligible homebuyers within a specified timeframe of project completion

If the CHDO develops the property for an owner pursuant to a written or other agreement with the PJ, the CHDO is acting in the capacity of a subrecipient. CHDOs receiving funds as subrecipients cannot use the funds from the 15 percent set-aside for that particular project or service.


Example of a CHDO as a developer:
A CHDO locates a property suitable for rental development. The owner of the property does not wish to sell the property, but will enter into a lease agreement with the CHDO. The CHDO successfully rehabilitates 25 affordable two-bedroom apartments. After the project has been completed, the CHDO will manage the property and continue to lease it from the owner.


Related Information

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