Q. What is a CHDO?
A. Community Housing Development Organization (CHDO) means a private
nonprofit organization that is:
(1) Is organized under State or local laws;
(2) Has no part of its net earnings inuring to the benefit of any member, founder, contributor, or individual;
(3) Is neither controlled by, nor under the direction of, individuals or entities seeking to
derive profit or gain from the organization. A community housing development organization may be sponsored or created by a for-profit entity, but:
(i) The for-profit entity may not be an entity whose primary purpose is the
development or management of housing, such as a builder, developer, or real
estate management firm.
(ii) The for-profit entity may not have the right to appoint more than one-third of
the membership of the organization’s governing body. Board members appointed
by the for-profit entity may not appoint the remaining two-thirds of the board members; and
(iii) The community housing development organization must be free to contract
for goods and services from vendors of its own choosing;
(4) Has a tax exemption ruling from the Internal Revenue Service under section 501(c)
(3)or (4) of the Internal Revenue Code of 1986 (26 CFR1.501(c)(3)–1);
(5) Does not include a public body (including the participating jurisdiction). An
organization that is State or locally chartered may qualify as a community housing
development organization; however, the State or local government may not have the
right to appoint more than one-third of the membership of the organization’s governing
body and no more than one-third of the board members may be public officials
or employees of the participating jurisdiction or State recipient. Board members
appointed by the State or local government may not appoint the remaining
two-thirds of the board members;
(6) Has standards of financial accountability that conform to 24 CFR 84.21, ‘‘Standards
for Financial Management Systems;’’
(7) 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;
(8) Maintains accountability to low income community residents by:
(i) Maintaining at least one-third of its governing board’s membership for
residents of low-income neighborhoods, other low-income community residents,
or elected representative of low income neighborhood organizations.
For urban areas, ‘‘community’’ may be a neighborhood or neighborhoods, city,
county or metropolitan area; for rural areas, it may be a neighborhood or
neighborhoods, town, village, county, or multi-county area (but not the entire
State); and
(ii) Providing a formal process for low-income program beneficiaries to advise the
organization in its decisions regarding the design, siting, development, and
management of affordable housing;
(9) Has a demonstrated capacity for carrying out activities assisted with HOME funds. An
organization may satisfy this requirement by hiring experienced key staff members who
have successfully completed similar projects, or a consultant with the same type of
experience and a plan to train appropriate key staff members of the organization; and
(10) Has a history of serving the community within which housing to be assisted
with HOME funds is to be located. In general, an organization must be able to show one
year of serving the community before HOME funds are reserved
for the organization. However, a newly created organization formed by
local churches, service organizations or neighborhood organizations may meet
this requirement by demonstrating that its parent organization has at
least a year of serving the community.
2013 HOME FINAL Rule 92.2 Definitions.
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