2003 Part II - CHDO Certification and CHDO Application (PDF) by WinstonVenable

VIEWS: 4 PAGES: 17

									                              PART II:
  Tab A: Application for Community Housing Development Organization 

                          (CHDO) Certification 

                                  &

                  Tab B: CHDO Certification Summary 





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                                                               Tab A
Completed CHDO Certification Application




January 2003     2003 Rental Housing Development Application      37

                   T E X A S            D E P A R T M E N T                  O F
                           HOUSING AND COMMUNITY AFFAIRS
                P.O. BOX 13941, AUSTIN, TEXAS 78711-3941, (512) 475-4577,
                FAX: (512) 475-3746

                                      Application for
              Community Housing Development Organization (CHDO) Certification


Organization Name:


Address:


City:                    State:           Zip:          Phone: (     )          Fax: (    )


Email:                                                 Internet address:


Executive Director:


Contact Person (If different from above):

Address:

City:                    State:           Zip:          Phone: (    )           Fax: (    )


Date of Incorporation:


Tax ID Number:


IRS Tax Status: (Please check appropriate box)
                                           501(c)(3)           § Received                § Pending
                                           501(c)(4)           § Received                § Pending

                                          Other:



Note: If all requirements under 10 TAC Section 53.63 are met, the Applicant will be certified as a CHDO upon
the award of HOME funds by the Department. A new application for CHDO certification must be submitted
to the Department with each new application for HOME funds under the CHDO set-aside.



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The information contained in the following checklist refers to the definition of a Community Housing
Development Organization (CHDO) as stated in 42 CFR, Section 92.2 of the HOME regulations and is
pursuant to Section 53.63 of TDHCA HOME rules (10 TAC Sec. 53.63). Please attach the following
documentation with your request for certification:

                                        CHDO CHECKLIST
I.   LEGAL STATUS

A. The nonprofit organization is organized under the Texas Nonprofit Corporation Act or other state not-for-
profit/nonprofit statute, as evidenced by:

                 ________         Charter, OR      

                 ________         Articles of Incorporation 


             *CHARTER OR ARTICLES OF INCORPORATION MUST BE FILED WITH
                           SECRETARY OF STATE OF TEXAS*

B. No part of organization’s net earnings inure to the benefit of any member, founder, contributor, or
   individual, as evidenced by:
                ________        Charter, OR
                ________        Articles of Incorporation

C. 	 Has a tax exemption ruling from the Internal Revenue Service (IRS) under Section 501(c)(3) or (4) of the
     Internal Revenue Code of 1986, as evidenced by:

                 ________          501(c)(3) or (4) Certificate from the IRS that is dated 1986 or later.
                                                         OR
     Is classified as a subordinate of a central organization nonprofit under the Internal Revenue Code, as
     evidenced by:

                 ________	        A group exemption letter from the IRS, that is dated 1986 or later which
                                  specifically lists the CHDO as part of the group exemption.

                                  NOTE: The exemption ruling from the IRS must be effective on the date of
                                  application and must continue to be effective while the organization is
                                  certified as a CHDO. Pending applications with the IRS for either 501(c)(3)
                                  or (4) status cannot be used to comply with this tax status requirement.

D. 	 Has among its purposes the provision of decent housing that is affordable to low and moderate income
     people, as evidenced by a statement in the organization’s:

                 ________         Charter, OR      

                 ________         Articles of Incorporation, OR 

                 ________         Resolutions, OR      

                 ________         By-laws      





II. CAPACITY

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A. 	 Conforms to the financial accountability standards of 24 CFR Sec. 84.21, “Standards of Financial
     Management Systems”, as evidenced by:

                ________	        Affidavit in a form prescribed by TDHCA (see attached) signed by the
                                 Executive Director or Chief Financial Officer of the organization and
                                 notarized, OR
                ________         A certification from a Certified Public Accountant, OR
                ________         A HUD approved audit summary

             *ANY SUBMISSION OTHER THAN THE TDHCA APPROVED AFFIDAVIT
                           MUST REFERENCE 24 CFR Sec. 84.21*

    NOTE:	      A CHDO cannot receive assistance under 24 CFR Sec. 92.302(c)(1),organizational support
                and (c)(2), housing education of the HOME regulations for any fiscal year in an amount that,
                together with other federal assistance provides more than 50 percent of the organization’s total
                operating budget in the fiscal year.

B. Has a demonstrated capacity for carrying out activities assisted with HOME funds, as evidenced by:

                ________ 	       Resumes and/or statements that describe the experience of key staff members
                                 who have successfully completed projects similar to those to be assisted with
                                 HOME funds, OR

                ________ 	       Contract(s) to train key staff of the organization. Consulting individuals or
                                 firms must have housing experience similar to the project to be assisted with
                                 HOME funds.

C. 	 Has a history of serving the community within which housing to be assisted with HOME funds is to be
     located, as evidenced by:

                ________ 	       A statement that documents at least one year of experience in serving the
                                 community, OR

                ________	        For newly created organization formed by local churches, service or
                                 community organizations, a statement that documents that its parent
                                 organization has at least one year of experience in serving the community.

      *STATEMENT MUST INCLUDE GEOGRAPHICAL AREA TO BE SERVED BY CHDO*

    NOTE:	      The CHDO or its parent organization must be able to show one year of serving the community
                prior to the date the participating jurisdiction provides HOME funds to the organization. If an
                organization or its parent company does not have one year of serving the community,
                but has staff or board members who have served the community for at least a year, the
                organization may use this individual experience to meet this requirement. In the
               statement, the organization must describe its history (or its parent organization’s history) of
               serving the community by describing activities which it provided (or its parent organization
               provided), such as developing new housing, rehabilitating existing stock and managing
               housing stock, or delivering non-housing services that have had lasting benefits for the
               community, such as counseling, food relief, or childcare facilities. The statement must be
               signed by the president or other official of the organization.
D. Has current application for Department HOME funds under the CHDO set-aside, as evidenced by:

                ________         The current HOME Certification and Application for Assistance Form.

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E. 	 If the service area is located in a local HOME Participating Jurisdiction (PJ) the organization must be
     certified as a CHDO in the PJ service area, as evidenced by:

                ________         Designation by local taxing authority, OR

                ________         PJ CHDO certification or designation, OR

                ________ 	       A letter from the local taxing authority or PJ stating that project locality does
                                 not participate in HOME activity funding.

III. ORGANIZATIONAL STRUCTURE

   	
A. Maintains at least one-third of its governing board’s membership for residents of low-income
   neighborhoods, other low-income community residents, or elected representatives of low-income
   neighborhood organizations as evidenced by the organization’s:

                ________         By-laws, OR        

                ________         Charter, OR      

                ________         Articles of Incorporation 


                                                      AND

                ________	        Affidavit (see attached) signed by the organization’s Executive Director and
                                 notarized.
                                                      AND

                ________ 	       Current roster of all Board of Directors, including names and mailing
                                 addresses. Required one-third low-income residents or elected representatives
                                 must be marked on list as such.

    NOTE:	     Under the HOME program, for urban areas, the term “community” is defined as one or several
               neighborhoods, a city, county, or metropolitan area. For rural areas, “community” is defined as
               one or several neighborhoods, a town, village, county, or multi-county area (but not the whole
               state).
               “Low income” is defined by the U.S. Department of Housing and Urban Development (HUD) as an
               annual income that does not exceed eighty percent (80%) of the median income for the area, with
               adjustments for family size.

B. 	 Provides a formal process for low-income program beneficiaries to advise the organization in all of its
     decisions regarding the design, siting, development, and management of affordable housing projects, as
     well as procedures explaining how the formal process will be implemented (public hearings, flyers, media,
     etc.), as evidenced by:

                ________         The organization’s By-laws, OR 

                ________         Resolutions, OR     

                ________         A written statement of operating procedures approved by the governing body.

                                 Statement must be on original letterhead, signed by the Executive Director
                                 and evidence date of board approval.

C. 	 A CHDO may be chartered by a State or local government, but the following restrictions apply: (1) the
     State or local government may not appoint more than one-third of the membership of the organization’s
     governing body; (2) the board members appointed by the State or local government may not, in turn,
     appoint the remaining two-thirds of the board members; and (3) no more than one-third of the governing
     board members are public officials (including any public employees), as evidenced by the organization’s:

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                   ________      By-laws, OR        

                   ________      Charter, OR      

                   ________      Articles of Incorporation 


D. 	 If the CHDO is sponsored or created by a for-profit entity, the for-profit entity may not appoint more than
     one-third of the membership of the CHDO’s governing body, and the board members appointed by the for-
     profit entity may not, in turn, appoint the remaining two-thirds of the board members, as evidenced by the
     CHDO’s:

                   ________      By-laws, OR        

                   ________      Charter, OR      

                   ________      Articles of Incorporation 


IV. RELATIONSHIP WITH FOR-PROFIT ENTITIES

A. 	 The CHDO is not controlled, nor receives directions from individuals, or entities seeking profit from the
     organization, as evidenced by:

                   ________      The organization’s By-laws, OR
                   ________      A Memorandum of Understanding (MOU)

B. 	A Community Housing Development Organization may be sponsored or created by a for-profit entity
    provided the for-profit entity’s primary purpose does not include the development or management of
    housing, as evidenced:
                ________        In the for-profit organization’s By-laws




                           Please mail documentation and this cover sheet to:
                           Texas Department of Housing & Community Affairs
                                        Housing Resource Center
                                            P.O. Box 13941
                                         Austin, TX 78711-3941
                    If you require further information or clarification, please contact 

                                               Jorge Reyes 

                               (512) 475-4577 or jreyes@tdhca.state.tx.us 

Revised 09/19/02




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                                                             Tab B
CHDO Certification Summary




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                   T E X A S             D E P A R T M E N T                        O F
                                 HOUSING AND COMMUNITY AFFAIRS
                P.O. BOX 13941, AUSTIN, TEXAS 78711-3941, (512) 475-4577, FAX:
                      (512) 475-3746

                      Community Housing Development Organization (CHDO)
                                    Application Summary

A Community Housing Development Organization (CHDO) is a private, nonprofit, community-based
service organization as defined by 24 CFR 92.2 that has obtained or intends to obtain staff with the capacity to
develop affordable housing for the community it serves. The following summary offers suggestions to
nonprofit organizations on how the State of Texas CHDO application should be completed. Any organization
applying for State CHDO status must submit to the Texas Department of Housing and Community Affairs all
the required documentation asked for in the application. Samples of some of the required documentation are
included in this summary. Please note that these samples are provided to help organizations complete the
CHDO application and should only be used as a reference.

I.      LEGAL STATUS

A.	     The organizational Charter or Articles of Incorporation must be registered with the Secretary of State
        of Texas to do business in Texas. A copy of the Secretary of State Certificate or a copy of the stamped
        and registered Articles of Incorporation must be submitted with the application. If a foreign
        corporation submits either its Charter or Articles of Incorporation, each must be registered with the
        Secretary of State of Texas to do business in Texas.

B.	     The organization’s Charter or Articles of Incorporation must state that as a nonprofit organization it
        will ensure that, “No part of its net earnings inure to the benefit of any member, founder, contributor,
        or individual.” If this statement, or something similar, is not stated on either the Charter or Articles of
        Incorporation, the application will be denied.

C.	     No organization can apply for CHDO status unless it has a 501(c)(3) or (4) exemption ruling from the
        IRS. The organization’s IRS exemption letter dated 1986 or later must be included with the
        application; this includes the final determination letter or the conditional letter that has not yet expired.
        Subordinates of a central organization and LLCs must include a group exemption letter from the IRS
        dated 1986 or later. PLEASE NOTE: The exemption ruling from the IRS must be effective on the
        date of application and must continue to be effective while the organization is certified as a CHDO.
        Pending applications with the IRS for either 501(c)(3) or (4) statuses cannot be used to comply with
        this tax status requirement.

D.	     The organization’s Charter, Articles of Incorporation, Board Resolution, or By-laws must state that as
        a nonprofit organization, it has among its purposes, “the provision of decent housing that is affordable
        to low and moderate income persons.” If this statement, or something similar, is not stated either on
        the Charter, Articles of Incorporation, a Board Resolution, or By-laws, the application will be denied.

II.     CAPACITY

A.	     The organization must conform to the financial accountability standards of 24 CFR 84.21 by
        completing the Affidavit of Standards for Financial Management Systems. (Sample 1). Also please
        remember that any submission other than the Affidavit of Standards for Financial Management
        Systems (a certification from a Certified Public Accountant, or a HUD approved audit summary) must


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       reference 24 CFR 84.21. If 24 CFR 84.21 is not referenced on any submission other than the affidavit
       the application will be denied.

B.	    An organization must demonstrate capacity for carrying out activities assisted with HOME funds.
       Resumes (Sample 2) of experienced key staff that have successfully completed projects similar to
       those proposed by the organization may be submitted. Key staff with limited or no experience may
       submit a statement describing past or future capacity training. The use of experienced consultants for
       the planning and development activities is also allowed, as long as there is a plan in place for the
       consultant to train the key staff. Because the purpose of the CHDO capacity requirements is to build
       staff expertise, CHDOs must have their own professional staffs. Therefore, key staff cannot be made
       up of the following:

               •   Municipal, county, or state employees
               •   Consultants (paid or volunteered) not planning to train for the CHDO’s key staff

C.	    An organization or its parent company must show at least one year of serving the community where it
       will develop affordable housing (Sample 3). The year of service does not have to be directly related to
       housing. If an organization or its parent company does not have one year of serving the community,
       but has staff or board members who have served the community for at least a year, the organization
       may use this individual experience to meet this requirement. The service area should also be clearly
       defined in the application. Please note the service area may be a contiguous multi-county area, but
       that the entire state of Texas cannot be considered the CHDO’s service area.

III.   Organizational Structure

A.	    An organization must state in either its By-laws, Charter, or Articles of Incorporation that, “at least
       one-third of board of director’s membership will be made up of residents of low-income
       neighborhoods, other low-income community residents, or elected representatives of low-income
       neighborhood organizations.” If this requirement is not stated on either of the above mentioned
       documents, the CHDO application will be denied. A notarized Affidavit of Board Representation and
       Board of Director’s roster, with member’s mailing addresses and clear indication as to which members
       are low-income residents or representatives, must also be submitted (Samples 4 &5).

B.	    Provides a formal process for low-income, program beneficiaries to advise the organization in all of its
       decisions regarding the design, siting, development, and management of affordable housing projects.
       The organization’s formal process must be stated in its By-laws, Board Resolution, or written
       statement of operating procedures approved by the governing body (Sample 6). The organization
       must also state how it will implement the formal process (i.e. public hearings, flyers, media, etc.).
       This requirement is separate from the requirement that one-third of the Board members represent the
       low-income community.

C.	    State or local governments creating a CHDO cannot have more than one-third public sector
       representation (elected officials, appointed public officials, public employees, or person appointed by a
       public official) on the governing board. This limitation is intended to ensure that separation exists
       between PJs and CHDOs, and that CHDOs are indeed community-based and community-controlled
       organizations.

D.	    If the organization is sponsored or created by a for-profit entity, its By-laws, Charter, or Articles of
       Incorporation must state that, “the for-profit entity cannot appoint more than one-third of the
       membership of the CHDO’s governing board, and the board members appointed by the for-profit
       entity may not, in turn, appoint the remaining two-thirds of the board members.” The application will
       be denied if this statement, or something similar, is not stated on the documents mentioned above.

IV.    RELATIONSHIP WITH FOR-PROFIT ENTITIES
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A.	   A CHDO cannot be controlled by, nor be under the direction of, for-profit entities or individuals
      seeking profit from the organization.

B.	   The primary function of the for-profit sponsor is not the development or management of housing (That
      is, a builder, developer or real estate management firm may not spin off a CHDO).

               If you require further information or clarification, please contact 

                                          Jorge Reyes 

                          (512) 475-4577 or jreyes@tdhca.state.tx.us 





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                                             SAMPLE 1 

    SECTION II A, CAPACITY (NOTARIZED AFFIDAVIT) 

 Texas Department of Housing and Community Affairs
            Community Housing Development Organization (CHDO)
                Certification




 Affidavit of Standards for Financial Management Systems
Date: __January 1, 2001___

Affiant: _John Doe___________

Recipient: Southside Community Development Corporation________
                        (Insert exact legal name of the organization)

Affiant on oath swears that the following statements are true and are within the personal knowledge of Affiant:
1.	 Affiant is the President AND/OR Chief Financial Officer of the Recipient and is authorized to make this
    affidavit on behalf of Recipient.
2.	 Recipient’s financial management systems conform to the financial accountability standards set forth
    in 24 CFR 84.21, by providing for and incorporating the following:
    a. Accurate, current, and complete disclosure of the financial results of each federally-sponsored project;
    b.	 Records which identify the source and application of funds for federally-sponsored activities. These records
        contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets,
        outlays, income, and interest;
    c.	 Control over and accountability for all funds, property and other assets; adequate safeguards of all such
        assets are adopted to assure that all assets are used solely for authorized purposes;
    d. Comparison of outlays with budget amounts for each award;
    e.	 Written procedures to minimize the time elapsing between the receipt of funds and the issuance or
        redemption of checks for program purposes by the recipient;
    f.	 Written procedures for determining the reasonableness, allocability, and allowability of costs in accordance
        with the provisions of Federal cost principles [Circular A-122] and the terms and conditions of the award;
    g. Accounting records, including cost-accounting records, that are supported by source documentation.

Signature: ______________________________

Signed before me under oath on ___________________________________

                   Notary                                           Notary Signature
                   Seal                                                     Notary Public
                                                                            State of Texas




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                                        SAMPLE 2 

           SECTION II B, CAPACITY (RESUMES AND/OR 

                         STATEMENTS) 

        SOUTHSIDE COMMUNITY DEVELOPMENT CORPORATION



                                     RESUME OF JOHN DOE

Mr. John Doe is the Executive Director of Southside Community Development Corporation. Mr.
Doe has more than 20 years experience in the development, underwriting, and implementation of
affordable housing. He started his career with the U.S. Department of Housing and Urban
Development and is extremely knowledgeable with all HUD programs and regulations.

Mr. Doe has also been instrumental in the development of affordable housing in Houston, the Rio
Grande Valley, and Central Texas. He also lends his services to other non-profit organizations that
are interested in becoming a Community Housing Development Organization.




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                                        SAMPLE 3 

                       SECTION II C, CAPACITY (COMMUNITY HISTORY)

        SOUTHSIDE COMMUNITY DEVELOPMENT CORPORATION


                                    SOUTHSIDE CDC HISTORY

Southside CDC (SCDC) was formed in 1994 as a 501(c)(3) nonprofit corporation to serve the Austin area.
SCDC’s main objective is to provide affordable housing to low-income individuals throughout the Austin
metropolitan area and surrounding communities. To date SCDC has developed two multi-family projects in
Del Valle, outside the city limits of Austin.

A major portion of the funding for the development of these two multi-family projects came from the
Texas Department of Housing and Community Affairs’ HOME program. SCDC plans to apply for
future HOME funds to help develop 3 more multi-family projects in Pflugerville and Manor.




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                                      SAMPLE 4 

        SECTION III A, ORGANIZATIONAL STRUCTURE (NOTARIZED AFFIDAVIT)


Texas Department of Housing and Community Affairs
          Community Housing Development Organization (CHDO)
               Certification




                               Affidavit of Board Representation


On this 1 day of January, 2001 I, John Doe hereby certify that the individuals identified in

the attached exhibit are residents of a low income neighborhood, other low income

community resident, or elected representative of a low income neighborhood organization

and is an active member of Southside CDC’s Board of Directors. “Low-income” is defined

as households whose annual incomes do not exceed 80% of the median income for the area,

as determined by HUD with adjustments for smaller and larger families.

I certify that the above statement is true and correct. I understand that any misstatement or
falsification of information shall be grounds for denial or revocation of certification for
CHDO status.


Executive Director                               Date

NOTARY INFORMATION:                                                        Notary
                                                                           Seal


NOTARY SIGNATURE 




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                                     SAMPLE 5 

       SECTION III A ORGANIZATIONAL STRUCTURE 

              (CURRENT BOARD ROSTER) 

       SOUTHSIDE COMMUNITY DEVELOPMENT CORPORATION



                     SOUTHSIDE CDC’s BOARD OF DIRECTORS ROSTER


Tom Smith 

PO Box 123 

Austin, TX 78711 


June Moore* 

PO Box 456 

Del Valle, TX 78617 


Marcos Flores 

PO Box 789 

Austin, TX 78711 



*Low-income representative




January 2003         2003 Rental Housing Development Application   51
                                      SAMPLE 6 

       SECTION III B, ORGANIZATIONAL STRUCTURE 

                    (FORMAL PROCESS) 

          SOUTHSIDE COMMUNITY DEVELOPMENT CORPORATION


                             STATEMENT OF FORMAL PROCESS


Southside CDC will at all times provide a formal process for low-income beneficiaries to advise the
organization in all of its decisions regarding the design, siting, development, and management of
affordable housing projects.

Southside CDC will implement the formal process by holding quarterly public hearings and make the
community aware of any projects it undertakes through broadcast media, flyers, and public
newspaper announcements. It will also accept public comment at all times via telephone, mail, email,
and other forms of communication.

Signed:



_________________________
Executive Director’s Signature


Approved by Southside CDC Board on 1/1/00 as witnessed by:



__________________________
Board Secretary’s Signature




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