harris county community and economic development department community housing development...

Harris CountyHarris CountyCommunity and Economic Community and Economic Development DepartmentDevelopment Department

Community Housing Development OrganizationCommunity Housing Development Organization

(CHDO) Workshop(CHDO) Workshop

March 15, 2006March 15, 2006

AgendaAgenda

Overview of HCCEDDOverview of HCCEDD CHDO OverviewCHDO Overview CHDO AssistanceCHDO Assistance Recordkeeping & MonitoringRecordkeeping & Monitoring Questions & Wrap-upQuestions & Wrap-up

Resources AvailableResources AvailableHUD Entitlement Funds, PY2006HUD Entitlement Funds, PY2006

Harris County will receive $15,004,622 for PY 2006.

CDBG $10,985,813

73%

ESG $466,583

3%

HOME/ADDI $3,552,226

24%

Service AreaService Area

Service AreaService Area Unincorporated Harris County and its 15 cooperative cities.Unincorporated Harris County and its 15 cooperative cities.

BellaireBellaire SeabrookSeabrookDeer Park Deer Park ShoreacresShoreacresGalena Park Galena Park South HoustonSouth HoustonHumble Humble TomballTomballJacinto City Jacinto City WallerWallerKaty Katy WebsterWebsterLaPorte LaPorte West University PlaceWest University PlaceMorgan’s PointMorgan’s Point

Houston, Baytown and Pasadena receive their ownHouston, Baytown and Pasadena receive their owncommunity development funds and are not includedcommunity development funds and are not included

in the Harris County service area.in the Harris County service area.

How it WorksHow it Works

Provides long term goals to improve quality of life for low-income people

Annual update to the Consolidated Plan allocating funds for the program year

Competitive process through which CDBG, ESG and HOME funds are allocated

Describes progress made towards goals set forth in the Consolidated Plan

Implementation and Monitoring

The Consolidated PlanThe Consolidated Plan

Five-year plan that addresses:Five-year plan that addresses: Housing;Housing; Social services;Social services; Infrastructure; andInfrastructure; and Community revitalization needs. Community revitalization needs.

Specifies types of projects to be Specifies types of projects to be fundedfunded

Application for federal funds under Application for federal funds under HUD’s formula grant programs:HUD’s formula grant programs:

CDBG;CDBG; HOME / ADDI; andHOME / ADDI; and ESG.ESG.

Basis for assessing performanceBasis for assessing performance

The Consolidated Plan aids decision The Consolidated Plan aids decision makers in creating strategies to address makers in creating strategies to address

the following:the following:

Employment and employability;Employment and employability; Affordable housing;Affordable housing; Adequate streets;Adequate streets; Water, sewage and drainage systems;Water, sewage and drainage systems; Quality education and Workforce Development;Quality education and Workforce Development; Parks and green space;Parks and green space; Community facilities;Community facilities; Quality health care;Quality health care; Crime awareness and public safety; andCrime awareness and public safety; and Safe, peaceful and productive neighborhoods for low- Safe, peaceful and productive neighborhoods for low-

and moderate-income communities.and moderate-income communities.

Request for Proposals (RFP)Request for Proposals (RFP)

Solicitation and acceptance of proposals Solicitation and acceptance of proposals According to federal and state According to federal and state

procurement laws and standardsprocurement laws and standards Applicants must:Applicants must:

Be a non-profit organization or Be a non-profit organization or governmental agency or entity;governmental agency or entity;

Expend funds within a 12-month Expend funds within a 12-month period;period;

Have sufficient working capital;Have sufficient working capital; Meet one Consolidated Plan Meet one Consolidated Plan

Objective;Objective; Meet one National Objective;Meet one National Objective; Benefit eligible residents in CEDD’s Benefit eligible residents in CEDD’s

HUD Service Area.HUD Service Area. Used to address objectives identified in Used to address objectives identified in

Harris County’s Consolidated PlanHarris County’s Consolidated Plan

Annual Action Plan (AAP) Annual Action Plan (AAP)

Detailed description of the Detailed description of the allocations of Harris County allocations of Harris County HUD entitlement dollars HUD entitlement dollars (CDBG, HOME, and ESG).(CDBG, HOME, and ESG).

Discusses how resources Discusses how resources generated by tax dollars will generated by tax dollars will be utilized for the upcoming be utilized for the upcoming program year.program year.

Agencies Receive AllocationsAgencies Receive Allocations

Contracts are developed Contracts are developed between Harris County between Harris County and agencies.and agencies.

Funds are dispersed on a Funds are dispersed on a reimbursement basis.reimbursement basis.

Grants Management staff Grants Management staff monitors all projects.monitors all projects.

Consolidated Annual Performance & Consolidated Annual Performance & Evaluation Report (CAPER)Evaluation Report (CAPER)

Describes progress.Describes progress.

Reviews and reports Reviews and reports county’s use of county’s use of Entitlement funds.Entitlement funds.

Benchmark for projects Benchmark for projects to be funded.to be funded.

Allows for self-Allows for self-assessment.assessment.

CHDO OverviewCHDO Overview

A Community Housing Development A Community Housing Development Organization (CHDO) is a private Organization (CHDO) is a private

nonprofit, community-based service nonprofit, community-based service organization that has obtained or organization that has obtained or

intends to obtain staff with the intends to obtain staff with the capacity to develop affordable capacity to develop affordable

housing for the community it serves.housing for the community it serves.

What is a CHDO?What is a CHDO?

CHDO Set-AsideCHDO Set-Aside

15% of the HOME allocation must 15% of the HOME allocation must be distributed to housing owned, be distributed to housing owned, developed, or sponsored by CHDOs. developed, or sponsored by CHDOs. (PY06 CHDO Allocation = $522,746)(PY06 CHDO Allocation = $522,746)

Jurisdictions have 24 months to Jurisdictions have 24 months to reserve funds for CHDOs.reserve funds for CHDOs.

CHDO Qualifying CriteriaCHDO Qualifying Criteria

CHDOs must meet requirements CHDOs must meet requirements pertaining to their:pertaining to their:

Legal StatusLegal Status Organizational structureOrganizational structure Capacity and experienceCapacity and experience


Legal StatusLegal StatusTo be eligible, organizations must:To be eligible, organizations must:

Be organized under state and local law;Be organized under state and local law; Have their purpose as providing decent and Have their purpose as providing decent and

affordable housing to low/mod income persons;affordable housing to low/mod income persons; Provide no individual benefit;Provide no individual benefit; Have a clearly defined service area; andHave a clearly defined service area; and Have an IRS non-profit status. Have an IRS non-profit status. (501(c)3 or 501(c)4(501(c)3 or 501(c)4


Organizational StructureOrganizational Structure

1/3 of the board members must be 1/3 of the board members must be residents of the low-income communityresidents of the low-income community

No more than 1/3 of the board members No more than 1/3 of the board members can be from the public sectorcan be from the public sector

Balance is unrestricted except when Balance is unrestricted except when sponsored/organized by a for-profitsponsored/organized by a for-profit

To meet the 1/3 minimum requirement:To meet the 1/3 minimum requirement:Residents of low-income neighborhoods Residents of low-income neighborhoods

in the communityin the communityResidents of the community that are Residents of the community that are

qualified as low incomequalified as low incomeElected representatives of low-income Elected representatives of low-income

neighborhood organizationsneighborhood organizations

Low-Income RepresentationLow-Income Representation



Low-income beneficiaries provide input to Low-income beneficiaries provide input to CHDOs through an established formal CHDOs through an established formal process that is:process that is: Described in writing; andDescribed in writing; and Stated in by-laws or resolution.Stated in by-laws or resolution.

Ways to achieve this:Ways to achieve this: Special committees or neighborhood Special committees or neighborhood

advisory councils; andadvisory councils; and Open town meetingsOpen town meetings

Low-Income InputLow-Income Input



Public sector representatives include:Public sector representatives include: Elected Officials; Elected Officials; Appointed officials;Appointed officials; Public employees; and Public employees; and Persons appointed by a public official.Persons appointed by a public official.

Low-income public officials count against Low-income public officials count against the 1/3 public sector maximum.the 1/3 public sector maximum.

CHDO Qualifying Criteria CHDO Qualifying Criteria


For-profit entities can sponsor a CHDO:For-profit entities can sponsor a CHDO: CHDO cannot be controlled by the for-profit;CHDO cannot be controlled by the for-profit; Primary purpose of for-profit cannot be Primary purpose of for-profit cannot be

housing ownership/management;housing ownership/management; For-profit representatives cannot be more For-profit representatives cannot be more

than 1/3 of the board; andthan 1/3 of the board; and CHDO must be free to contract for CHDO must be free to contract for

goods/services from any vendor.goods/services from any vendor.

CHDO Spin-OffsCHDO Spin-Offs

CHDO Qualifying Criteria CHDO Qualifying Criteria



Capacity and ExperienceCapacity and Experience

Organization must: Organization must: Have at least ONE YEAR of experience Have at least ONE YEAR of experience

serving the community;serving the community; Demonstrate staff capacity to carry out Demonstrate staff capacity to carry out

planned activities; andplanned activities; and Have financial accountability standards.Have financial accountability standards.

Capacity must be relevant to type of CHDO Capacity must be relevant to type of CHDO activity to be undertaken.activity to be undertaken.

Don’t make these mistakes:Don’t make these mistakes: No geographic boundaries to service No geographic boundaries to service

area;area; Not received IRS tax exempt status letter;Not received IRS tax exempt status letter; Not recertified each year; Not recertified each year; No organizational and financial No organizational and financial

capacity.capacity. *CHDO certifications from neighboring jurisdictions are *CHDO certifications from neighboring jurisdictions are

ineligible for Harris County CHDO Set-Aside Funds.ineligible for Harris County CHDO Set-Aside Funds.

CHDO Certification*CHDO Certification*

CHDOCHDO Qualifying CriteriaQualifying Criteria


Eligible uses of CHDO set-aside fundsEligible uses of CHDO set-aside funds Acquisition and/or rehab of rental or Acquisition and/or rehab of rental or

homebuyer housinghomebuyer housing New Construction (rental or New Construction (rental or

homebuyer)homebuyer) Direct financial assistanceDirect financial assistance

Buyers of HOME-assisted units Buyers of HOME-assisted units Sponsored/developed by CHDOSponsored/developed by CHDO



Ineligible uses of CHDO set-aside Ineligible uses of CHDO set-aside funds:funds:

Tenant-based rental assistance Tenant-based rental assistance (TBRA)(TBRA)

Homeowner rehabHomeowner rehab “ “Brokering” or other real estate Brokering” or other real estate

transactiontransaction

CHDOCHDO Qualifying Criteria Qualifying Criteria


To count toward CHDO set-To count toward CHDO set-aside funds, the CHDO must aside funds, the CHDO must act as:act as:

Owner;Owner; Developer; or Developer; or Sponsor.Sponsor.

CHDO RolesCHDO Roles

As owner, CHDO:As owner, CHDO: Holds valid legal title; ORHolds valid legal title; OR Has long-term leasehold investment.Has long-term leasehold investment.

CHDO may be an owner in CHDO may be an owner in Partnerships: Partnerships: Must have effective control.Must have effective control.

CHDO may be both owner and CHDO may be both owner and developer of its own project.developer of its own project.

CHDO as OwnerCHDO as Owner

CHDO owns a property OR has contractual CHDO owns a property OR has contractual obligation to the property owner to:obligation to the property owner to: Obtain financing; ANDObtain financing; AND Rehabilitate or construct property.Rehabilitate or construct property.

If a rental project, the CHDO may also If a rental project, the CHDO may also manage project.manage project.

If a homeownership project, CHDO If a homeownership project, CHDO transfers property to homebuyer.transfers property to homebuyer.

CHDO as DeveloperCHDO as Developer

Of rental housing, the CHDO: Of rental housing, the CHDO: Develops a project that is solely or Develops a project that is solely or

partially owned;partially owned; Conveys ownership to a second non-Conveys ownership to a second non-

profit.profit.

Of homebuyer project, the CHDO:Of homebuyer project, the CHDO: Owns property and shifts responsibility Owns property and shifts responsibility

to second non-profit;to second non-profit; Second non-profit transfers title and Second non-profit transfers title and

obligations to homebuyers.obligations to homebuyers.

CHDO as SponsorCHDO as Sponsor

CHDO AssistanceCHDO Assistance

CHDOs may take on the role of CHDOs may take on the role of subrecipient subrecipient Not a CHDO set-aside activityNot a CHDO set-aside activity

May not receive HOME funds for a May not receive HOME funds for a project through the subrecipient project through the subrecipient activityactivity

Please note: CHDO may not receive set-aside and general HOME funds for Please note: CHDO may not receive set-aside and general HOME funds for same project. same project.

CHDO vs. SubrecipientsCHDO vs. Subrecipients

Jurisdictions may provide special Jurisdictions may provide special forms of assistance to CHDOs: forms of assistance to CHDOs:

Project pre-development loans;Project pre-development loans; Operating assistance; Operating assistance; Use of HOME project proceeds;Use of HOME project proceeds; Capacity-building assistance.Capacity-building assistance.

Special AssistanceSpecial Assistance

Costs must be:Costs must be: Related to a specific project; Related to a specific project; For HOME eligible activities.For HOME eligible activities.

Uses and costs must be customary Uses and costs must be customary and reasonable.and reasonable.

Up to 10% of set-aside.Up to 10% of set-aside. Not limited to 10% of a project.Not limited to 10% of a project.

Pre-Development FundsPre-Development Funds

Technical assistance and site control Technical assistance and site control loansloans Used to establish preliminary Used to establish preliminary

feasibility prior to site controlfeasibility prior to site control Do not require environmental Do not require environmental

clearanceclearance Seed money loansSeed money loans

Cover pre-construction costsCover pre-construction costs Must have site controlMust have site control

Types of Pre-Development LoansTypes of Pre-Development Loans

Up to 5% of HOME allocation may be Up to 5% of HOME allocation may be used for CHDO operating assistanceused for CHDO operating assistance

Eligible uses:Eligible uses: Organizational support;Organizational support; Housing education;Housing education; Administrative expenses; andAdministrative expenses; and Operating expenses.Operating expenses.

CHDO Operating AssistanceCHDO Operating Assistance

Assistance may NOT exceed:Assistance may NOT exceed:

$50,000 each fiscal year; OR$50,000 each fiscal year; OR 50% of CHDOs total annual operating 50% of CHDOs total annual operating

expenses for that year.expenses for that year.

WHICHEVER IS GREATER!WHICHEVER IS GREATER!

Admin funds to CHDOs acting as Admin funds to CHDOs acting as subrecipients do NOT count towards cap.subrecipients do NOT count towards cap.

Limitations on Operating AssistanceLimitations on Operating Assistance

Jurisdictions may allow CHDO to retain Jurisdictions may allow CHDO to retain some or all proceeds.some or all proceeds.

Proceeds might be:Proceeds might be: Proceeds from permanent financing;Proceeds from permanent financing; Interest on HOME loans.Interest on HOME loans.

Proceeds are NOT considered program Proceeds are NOT considered program income.income.

Project ProceedsProject Proceeds

Use of proceeds must be for: Use of proceeds must be for: HOME-eligible activities; ORHOME-eligible activities; OR Other low-income housing Other low-income housing

activities. activities. Written agreement with CHDO must Written agreement with CHDO must

include:include: Whether CHDO will retain any Whether CHDO will retain any

proceeds; andproceeds; and The specific use of proceeds.The specific use of proceeds.

Use of Project ProceedsUse of Project Proceeds

HOME funds can be used for CHDO HOME funds can be used for CHDO capacity building:capacity building:

Up to 20% of CHDO set-asideUp to 20% of CHDO set-aside Total cannot exceed $150,000Total cannot exceed $150,000 Use for intermediary organizations, Use for intermediary organizations,

training and TA or operating training and TA or operating expensesexpenses

Capacity-Building AssistanceCapacity-Building Assistance

Identify potential organizationsIdentify potential organizations

Determine eligibility and basic capacityDetermine eligibility and basic capacity Use the CHDO checklistUse the CHDO checklist

Assess additional needed capacity Assess additional needed capacity Organizational issuesOrganizational issues ExperienceExperience Financial managementFinancial management

Selecting CHDOsSelecting CHDOs

Record Keeping and Record Keeping and MonitoringMonitoring

Recordkeeping & MonitoringRecordkeeping & Monitoring

OverviewOverview

General recordkeeping General recordkeeping requirementsrequirements

Access to recordsAccess to records Retention of recordsRetention of records MonitoringMonitoring Reporting requirements Reporting requirements

General Recordkeeping RequirementsGeneral Recordkeeping Requirements

Records should be: Records should be: Accurate, complete, orderly; andAccurate, complete, orderly; and Maintained in order to:Maintained in order to:

Document all CHDO funded activities; Document all CHDO funded activities; and and

Demonstrate compliance with all Demonstrate compliance with all applicable program and other applicable program and other requirements.*requirements.*

* * According to U.S. Department of Housing and Urban Development Department (HUD) 24 CFR Part 570 and Part 570.208. According to U.S. Department of Housing and Urban Development Department (HUD) 24 CFR Part 570 and Part 570.208.

General Recordkeeping RequirementsGeneral Recordkeeping Requirements

Establish and maintainEstablish and maintain

Administrative recordsAdministrative records

Financial Records, andFinancial Records, and

Project/case files.Project/case files.

Access to RecordsAccess to Records

Records are used to create audits, examinations, Records are used to create audits, examinations, excerpts and transcripts. The following have excerpts and transcripts. The following have access to records of CHDO funded organizations:access to records of CHDO funded organizations:

CEDD representatives;CEDD representatives; HUD representatives;HUD representatives; Comptroller General’s Office of the United Comptroller General’s Office of the United

States;States; Other authorized governmental agencies;Other authorized governmental agencies; Citizens (24 CFR 570.508).Citizens (24 CFR 570.508).

Retention of RecordsRetention of Records

Retain records for periods of time after Retain records for periods of time after annual project activities have been annual project activities have been completed.completed.

Retain records for five years from the date of Retain records for five years from the date of submission of the CAPER in which activity is submission of the CAPER in which activity is reported for the last time. reported for the last time.

For all organizations (per 24 CFR 570.502(b)(3), 24 CFR 85.42, and OMB Circular For all organizations (per 24 CFR 570.502(b)(3), 24 CFR 85.42, and OMB Circular A-110, Attachment C)A-110, Attachment C)

MonitoringMonitoring

The primary mission of monitoring is to The primary mission of monitoring is to ensure that organizations are:ensure that organizations are:

In compliance with all regulations In compliance with all regulations governing their administrative, financial, governing their administrative, financial, and programmatic operations; and and programmatic operations; and

Achieving their performance objectives Achieving their performance objectives within the schedule and budget, as within the schedule and budget, as outlined in the Agreement.outlined in the Agreement.

MonitoringMonitoring

Five steps in a monitoring visitFive steps in a monitoring visit

Notification letterNotification letter

Entrance conferenceEntrance conference

Documentation, data acquisition and Documentation, data acquisition and analysisanalysis

Exit conferenceExit conference

Monitoring letterMonitoring letter

Reporting RequirementsReporting Requirements

Reporting requirements are specified Reporting requirements are specified by the Grantee (CEDD) in the by the Grantee (CEDD) in the Subrecipient Agreement.*Subrecipient Agreement.*

Programmatic and Reimbursement Programmatic and Reimbursement Request Reports are due monthly.Request Reports are due monthly.

Quarterly and Annual reports may also Quarterly and Annual reports may also apply. apply.

*24 CFR 570.503(b)(2).*24 CFR 570.503(b)(2).

Free Legal Advice to CHDOsFree Legal Advice to CHDOs

Christina E. TrejoChristina E. Trejo

Staff AttorneyStaff Attorney

Texas C-BarTexas C-Bar

712 Main St., Ste. 2700712 Main St., Ste. 2700

Houston, Texas 77002Houston, Texas 77002

Ph: (713) 228-0735 ext. 153Ph: (713) 228-0735 ext. 153

Fax: (512) 447-3940 Fax: (512) 447-3940

Questions Questions And And

AnswersAnswers

Questions?Questions?

Contact:Contact:

Lori Wilson-ReynoldsLori Wilson-ReynoldsProgram AnalystProgram Analyst

(713) 578-2000, ext. 2108(713) 578-2000, ext. [email protected][email protected]

Or visit our website at: Or visit our website at: www.cedd.hctx.netwww.cedd.hctx.net

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