All the goals necessary to achieve your housing production objective contain an element of risk. Though housing development is risky, nonprofit developers can control or reduce risk if they understand and identify specific factors that contribute to it. There are two types of risk: inherent risk and needless risk. Inherent risk is always present, but there are a number of techniques that can help to control it. On the other hand, a nonprofit developer’s decision or negligent actions can cause needless risk. Needless risk can also be prevented by understanding and following proper procedures, hiring qualified staff, providing proper training and support to your staff, and addressing issues early. Nonprofit housing developers are exposed to relatively high risk because they deliberately purchase homes for rehabilitation in distressed communities, serve clients with lower incomes and operate within narrow profit margins. Therefore, it is important that nonprofits understand where risk exists and how to minimize it. This is another area of risk that must be carefully considered when performing housing development functions. Nonprofits cannot sustain any size of financial losses for long. Therefore, we recommend that nonprofit organizations create a strong financial and record-keeping system in order to avoid inherent development risk related to budgets and cash flow.