CHDO as a Developer

Information by State  Print version   Related Information The key words below offer an explanation of each CHDO role and examples of CHDOs serving those roles.   Developer or Sponsor   Sponsor   Owner Did You Know? A CHDO’s role as developer may be very similar to that of a CHDO as a sponsor. For a brief discussion comparing the two, see CHDOs as developers or sponsors. How to Beome a CHDO   Characteristics   Roles and funding   Special assistance   Use of funds

A CHDO is considered a developer when it either:

owns the property and develops the project

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.