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Community Housing Development Organizations

(CHDOs)

A Briefing to the Housing Committee

Housing DepartmentJanuary 22, 2008

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Key Focus Area: Economic Vibrancy

PURPOSETo provide information with regard to Community Housing Development Organizations (CHDOs) that work with the City of Dallas

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Community Housing Development Organizations (CHDOs)

A CHDO is a private, nonprofit, community-based organization with the mission, experience, and capacity to develop affordable housingCHDO is a designation created by the Department of Housing and Urban Development for cities and states to recognize and certify nonprofit development partners

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CHDO Certification Criteria

In order for nonprofits to be certified, they must meet certain requirements:

Legal StatusOrganizational structureCapacity and experienceFinancial Statements Business Plan

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Legal Status

To be eligible, organization must:Be organized under state and local law (Incorporation through the State of Texas)Have as its purpose to provide decent and affordable housing to low/mod income persons (evidenced in by-laws)Have an IRS non-profit status 501(c)3

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Organizational Structure

CHDO board of directors must:Be made up of at least one-third low-income Dallas community representativesNot have more than one-third public sector representatives

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Capacity and ExperienceOrganizations must:

Have at least two years of experience developing housingDemonstrate staff knowledge and experience to carry out housing developmentHave financial capacity- CHDOs’ financial statements are reviewed for assets, liabilities, revenues, and expensesPresent a two-year business plan including a community outreach plan

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Special Opportunities for Certified CHDOs

The Department of Housing and Urban Development requires cities and states receiving HOME Investment Partnership Program funds to set-aside a minimum of 15% of its annual allocation specifically for CHDO development projects

This averages $1.5 million per year for the City of Dallas

The HOME Program requires specific project contracting within 2 years and expenditure of funds within 5 years

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Special Opportunities for CHDOs (continued)

CHDOs for the City of Dallas may apply for Operating Assistance Grants up to $50,000

There is a 5% cap on the City’s annual allocation for these funds

The total allocation is funded at the cap or about $400,000

These funds are typically spent in one year

CHDOs may access other CDBG project funds

These funds must be committed within one year and spent within two years

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Special Opportunities for CHDOs(continued)

CHDOs may access general obligation bond funds

CHDOs have a set-aside under the Mortgage Assistance Program (MAP) for subsidizing homebuyers for their projects

CHDOs have first right of refusal for Land Bank properties

CHDOs may acquire tax foreclosed & surplus property under the Land Transfer Program

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CHDO ActivitiesThe City of Dallas currently has sixteen certified CHDOs

Seven CHDOs are active and represent 95% of production

The number of active CHDOs has not increased in the last five years but loans & commitments from the City of Dallas have increased from $3.5 million to $11.7 million

The majority of CHDOs are engaged in single family development (new construction)

A few CHDOs are engaged in special needs housing and multifamily rehabilitation

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Challenge Increase production of active CHDOs and assist low producing and newly formed CHDOs

Capacity is an issue• Staffing is minimal and groups often need financial and

development professionals for housing development• Training and resources to learn about development are

needed-learning curve is steep• Constant grant writing to get financial support• Reporting and Administration for compliance• Difficult to attain self-sufficiency

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Challenge (continued)Areas being developed are the most economically challenged

• Take more time• Crime is an issue• Infrastructure needs• Transportation needs• Need neighborhood and marketing plans• Need more subsidy layering

Clients • Buyers/renters need a lot more counseling and

more subsidies

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SolutionsCreation of Additional Programs & Funding Sources to address challenges (including set-asides)

Allowing CHDOs to bring proposed developments forward at any time

Encouraging Partnerships between nonprofits and with for-profit entities

Neighborhood Investment Program to assist with neighborhood planning, infrastructure, and transportation coordination

Regular CHDO Meetings

Providing access to relevant trainings and technical assistance

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New SolutionsHousing Services Program

January 23, 2008 preliminary adoption of $100,000 from Community Development Block Grant Funds to provide assistance to CHDOs for housing counseling, loan processing, and other services related to assisting potential homebuyers participating or seeking to participate in HOME funded projects

If fully utilized, an additional $100,000 will be sought from reprogramming funds this fiscal year

On an ongoing basis, Housing Department will recommend that funding be included in the annual CDBG Budget

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New SolutionsHousing Trust Fund- creation of an umbrella program for all affordable housing efforts and funding with CHDO set-aside

Public Hearings to be held for citizen inputCreation of Program Statement with all input providedCity Council adoption of Program Statement

Technical Assistance-partnership formed with Texas Real Estate Council (TREC) to provide needed development services

Services such as legal, accounting, title work, architectural, engineering, construction management Provided both pro-bono and fee based, funded by City of Dallas

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New SolutionsTraining will be provided throughout the year for CHDO staff and CHDO board members by the City of Dallas, Enterprise Community Partners, and Professional Trainers

Financing & Putting Development Deals TogetherMulti-family DevelopmentMarketingBusiness Planning & Citizen InvolvementCompliance with applicable funding sources

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Next StepsJanuary 23, 2008-City Council preliminary adoption of CDBG Budget Amendment and calling of public hearing

February 27, 2008-City Council final adoption of CDBG Budget Amendment and creation of Housing Services Program

January/February 2008 – City Council public hearings for input on Housing Trust Fund

February/March 2008 – Housing Committee briefing on Housing Trust Fund recommended program

April 2008 – City Council approval of Housing Trust Fund Program

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AttachmentsA. List of Currently Certified CHDOsB. Operating Assistance Grant Awards 2003-2007C. Current CHDO Development Awards and

CommitmentsD. List of Housing Department Programs with

Descriptions