Guidelines and Applications for State of Ohio CHDO Certification for the 2017 Housing Tax Credit Program
ContentsGUIDELINES FOR STATE OF OHIO CHDO CERTIFICATION1Overview of the OHFA CHDO Set-Aside Program1CHDO Certification Summary1To Apply for CHDO State-Certification2The Application Submission Process2Process for Approving Applicant for CHDO Certification for the 2017 Housing Tax Credit Program3APPLICATION FOR CHDO CERTIFICATION FOR THE 2017 HOUSING TAX CREDIT PROGRAM6Qualifications for CHDO Certification7Legal Status7Capacity of the Organization7Serving the Service Area9Organizational Structure9Table 1a The Service Area11Table 1b Serving the Service Area11Table 2 Involving the Community12Table 3 - Housing Development History13Table 4a Housing Development Staff Experience15Table 4b Housing Development Staff Expertise16Table 5 Board Member Composition16SELF-CERTIFICATION FORM FOR CHDO BOARD MEMBERS18
Note about the CHDO Operating Grant Program.19
GUIDELINES FOR STATE OF OHIO CHDO CERTIFICATIONOverview of the OHFA CHDO Set-Aside Program
A Community Housing Development Organization (CHDO) is a special type of non-profit housing designation under the HOME Investment Partnership Program created by The Cranston-Gonzalez 1990 National Affordable Housing Act (NAHA). Among the purposes of NAHA, as amended, are to promote partnerships between States, units of general local government and non-profit organizations, and to expand a non-profit organizations capacity to develop and manage decent and affordable housing.
The Ohio Housing Finance Agency develops guidelines for its state-certified CHDO program, based on the Code of Federal Regulations Title 24- Housing and Urban Development, Part 92 HOME Investment Partnership Program. Attaining state-certified status indicates that the organization has the capacity to own, develop or sponsor a particular type (rental or owned) of HOME-assisted housing. It also indicates that the organization is in touch with the community it is chartered to serve.
The State of Ohio receives a yearly allocation of HOME funds from the Department of Housing and Urban Development. Fifteen percent of those funds must be set-aside to be awarded to CHDOs to develop housing. The Ohio Housing Finance Agency will distribute the set-aside for the State of Ohio through its 2017 Competitive (9%) Housing Tax Credit (HTC) Program in the form of gap financing for HTC developments. The terms and conditions of the disposition of all HOME funds can be found in the State Consolidated Plan. If the entire set-aside is not able to be absorbed by the HTC program, OHFA reserves the right, at its sole discretion, to allocate any remaining funds to other OHFA programs that conform to the HOME regulations.
CHDO Certification Summary
HOME rules require that housing development organizations (even previously state-certified CHDOs) must be certified as a CHDO each time they apply for a HOME-funded housing development or operating grant. Consequently, an organization can only be a CHDO if it is involved in a particular HOME-funded development project.
An applicant seeking to participate in a 9% Housing Tax Credit development as a state-certified CHDO must submit this CHDO Certification Application by the deadline indicated in the 2017 QAP program calendar. Those elements of the certification that can be reviewed by OHFA prior to the submission of the Housing Tax Credit Proposal, such as confirming proper board composition, non-profit status, mission to provide affordable housing, service areas, involving the community, etc. will be evaluated and applicants will be notified of any deficiencies with enough time to correct any issues prior to the HTC Proposal application deadline.
Once the HTC Proposal application is received and the details of the development become known, OHFA will make the final determination of CHDO eligibility. Determination will be based on evaluating the development experience of the paid staff and how that relates to the proposed development, the capacity of the CHDO to function as the sole general partner/sole managing member of the ownership entity, the appropriateness of the CHDO as a part of the development team, and the assessment of the financial capacity of the organization.
The organization can only be a state-certified CHDO for the type of development project (example - multi-family rental) for which it can demonstrate the on-staff capacity to sponsor a 9% Housing Tax Credit development. If prior development experience is in building and selling single family homes, the applicant most likely will not be certified as a CHDO to develop rental housing.
In a limited partnership, (LP) the CHDO or its subsidiary must be the sole general partner. In a limited liability company, (LLC) the CHDO or its subsidiary must be the sole managing member. Further, if the LP or LLC agreement permits the CHDO to be removed as general partner or sole managing member, the agreement must provide that the removal must be for cause and that the CHDO must be replaced with another CHDO.
The HOME program has changed over the years, and developing housing as a CHDO has taken on increased obligations and commitments. It is important that you become familiar with the current HOME regulations, as amended. The regulations as well as a section by section analysis of changes can be found at http://www.ecfr.gov/cgi-bin/text-idx?SID=72f5108e1bf34a8c309f1c05c1126c62&node=24:1.1.1.1.41&rgn=div5 (CHDO specific regulations are in Subpart G) and https://www.onecpd.info/onecpd/assets/File/Section-by-Section-Summary-2013-HOME-Final-Rule.pdf
To Apply for CHDO State-Certification
Use the attached application to apply for state-certified CHDO status. The due date for this CHDO certification application is in the 2017 QAP guidelines.
The Application Submission Process
Some of the responses require the same document to substantiate multiple conditions. You only need to submit each document once, but you must highlight and identify all of the relevant parts.
Do not send illegible documents. Take care that scanned documents are readable.
Do not send information that is not requested.
When complete, email this application, saved as a Word document with the organizations name as part of the file name, and all accompanying documentation files, which are named such that they can be easily identified in the review process. Example Articles of Incorporation.pdf.
Send the email to: [email protected]
The subject line of the email should read (name of organization) 2017 CHDO Certification
The email must be received on or before October 14, 2016
Process for Approving Applicant for CHDO Certification for the 2017 Housing Tax Credit ProgramDuring the HTC Pre-Proposal timeframe:
Applicant organization completes this application and returns it by the due date in the 2017 Qualified Allocation Plan Program Calendar (COMPETITIVE), which is Friday October 14, 2016.
Application will be reviewed for the following CHDO requirements:
A Community housing development organization means a private nonprofit organization that:
(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;
(iii) The community housing development organization must be free to contract for goods and services from vendors of its own choosing; and
(iv)The officers and employees of the for-profit entity may not be officers or employees of the community housing development organization.
(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 CFR 1.501(c)(3)-1 or 1.501(c)(4)-1)), is classified as a subordinate of a central organization non-profit under section 905 of the Internal Revenue Code of 1986, or if the private nonprofit organization is an wholly owned entity that is disregarded as an entity separate from its owner for tax purposes (e.g., a single member limited liability company that is wholly owned by an organization that qualifies as tax-exempt), the owner organization has a tax exemption ruling from the Internal Revenue Service under section 501(c)(3) or (4) of the Internal Revenue Code of 1986 and meets the definition of community housing development organization;
(5) Is not a governmental entity (including the participating jurisdiction, other jurisdiction, Indian tribe, public housing authority, Indian housing authority, housing finance agency, or redevelopment authority) and is not controlled by a governmental entity. An organization that is created by a governmental entity may qualify as a community housing development organization; however, the governmental entity 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 governmental entity. Board members appointed by a govern
