[Code of Federal Regulations]
[Title 24, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR92.300]

[Page 616-617]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
PART 92_HOME INVESTMENT PARTNERSHIPS PROGRAM--Table of Contents
 
          Subpart G_Community Housing Development Organizations
 
Sec. 92.300  Set-aside for community housing development organizations 
(CHDOs).


    (a)(1) Within 24 months after HUD notifies the participating 
jurisdiction of HUD's execution of the HOME Investment Partnerships 
Agreement, the participating jurisdiction must reserve not less than 15 
percent of the HOME allocation for investment only in housing to be 
developed, sponsored, or owned by community housing development 
organizations. For a State, the HOME allocation includes funds 
reallocated under Sec. 92.451(c)(2)(i) and, for a unit of general local 
government, funds transferred from a State under Sec. 92.102(b). The 
funds are reserved when a participating jurisdiction enters into a 
written agreement with the community housing development organization. 
The funds must be provided to a community housing development 
organization, its subsidiary, or a partnership of which it or its 
subsidiary is the managing general partner. If a CHDO owns the project 
in partnership, it or its wholly owned for-profit or non-profit 
subsidiary must be the managing general partner. In acting in any of the 
capacities specified, the community housing development organization 
must have effective project control. In addition, a community housing 
development organization, in connection with housing it develops, 
sponsors or owns with HOME funds provided under this section, may 
provide direct homeownership assistance (e.g. downpayment assistance) 
and not be considered a subrecipient.
    (2) The participating jurisdiction determines the form of 
assistance, e.g., grant or loan, that the community housing development 
organization receives and whether any proceeds must

[[Page 617]]

be returned to the participating jurisdiction or may be retained by the 
community housing development organization. While the proceeds the 
participating jurisdiction permits the community housing development 
organization to retain are not subject to the requirements of this part, 
the participating jurisdiction must specify in the written agreement 
with the community housing development organization whether they are to 
be used for HOME-eligible or other housing activities to benefit low-
income families. However, funds recaptured because housing no longer 
meets the affordability requirements under Sec. 92.254(a)(5)(ii) are 
subject to the requirements of this part in accordance with Sec. 
92.503.
    (b) Each participating jurisdiction must make reasonable efforts to 
identify community housing development organizations that are capable, 
or can reasonably be expected to become capable, of carrying out 
elements of the jurisdiction's approved consolidated plan and to 
encourage such community housing development organizations to do so. If 
during the first 24 months of its participation in the HOME Program a 
participating jurisdiction cannot identify a sufficient number of 
capable community housing development organizations, up to 20 percent of 
the minimum community housing development organization setaside of 15 
percent specified in paragraph (a) of this section, above, (but not more 
than $150,000 during the 24 month period) may be committed to develop 
the capacity of community housing development organizations in the 
jurisdiction.
    (c) Up to 10 percent of the HOME funds reserved under this section 
may be used for activities specified under Sec. 92.301.
    (d) HOME funds required to be reserved under this section are 
subject to reduction, as provided in Sec. 92.500(d).
    (e) If funds for operating expenses are provided under Sec. 92.208 
to a community housing development organization that is not also 
receiving funds under paragraph (a) of this section for housing to be 
developed, sponsored or owned by the community housing development 
organization, the participating jurisdiction must enter into a written 
agreement with the community housing development organization that 
provides that the community housing development organization is expected 
to receive funds under paragraph (a) of this section within 24 months of 
receiving the funds for operating expenses, and specifies the terms and 
conditions upon which this expectation is based.
    (f) Limitation on community housing development organization 
operating funds. A community housing development organization may not 
receive HOME funding for any fiscal year in an amount that provides more 
than 50 percent or $50,000, whichever is greater, of the community 
housing development organization's total operating expenses in that 
fiscal year. This also includes organizational support and housing 
education provided under section 233(b)(1), (2), and (6) of the Act, as 
well as funds for operating expenses provided under Sec. 92.208.

[61 FR 48750, Sept. 16, 1996, as amended at 62 FR 28930, May 28, 1997]