Mobile network traffic is expected to increase dramatically with the proliferation of smart and diverse wireless devices. Moreover, pervasive and complex services such as mobile cloud, device-to-device communications and mobile multimedia consumption will require higher bandwidth and better network coverage. Hence, more spectrum and capacity with small cells and self-organization of heterogeneous networks are posed as vital solutions to address this burgeoning demand. In this paper, we propose a novel distributed self-organization algorithm for single frequency reuse scheme of OFDMA based heterogeneous networks for improving network capacity with self-configuration and self-optimization. Our approach, namely Spectrum-Aware Dynamic Frequency Reuse (SADFR), enables deployment of single frequency network by mitigating interference while increasing capacity in OFDMA HetNets. Moreover, we provide a comparative performance evaluation of our algorithm and elaborate on interference management issues in these systems.