05-7-14-PC - Laserfiche WebLink

Home Browse Search

16 MassHousing MassHousing (formerly the Massachusetts Housing Finance Agency) is the state’s affordable housing bank,created by an act of the legislature in 1966 as a self-supporting,independent public authority charged with increasing affordable rental and home- ownership housing in Massachusetts. The agency lends money at rates below the conventional market rate to support rental and homeownership oppor- tunities for low- and moderate-income residents of Massachusetts,relying on private nonprofit and for- profit developers to construct and operate the rental housing that it finances. MassHousing sells federally authorized,tax-exempt,and taxable bonds to individ- ual and corporate investors,raising private capital for mortgages that it loans to eligible borrowers. This money is loaned at rates that are well below those offered by conventional lenders,thus making the housing financed more affordable to low- and moderate-income households. MassHousing makes financing available to develop- ers proposing to construct new,mixed-income rental housing developments in which a minimum of 20 per- cent of the units are affordable to low-income house- holds,or to refinance and extend affordability require- ments at existing developments through innovative and award-winning pro- grams. MassHousing offers “one-stop shop- ping” for developers of mixed-income rental hous- ing by providing construc- tion,bridge,and perma- nent financing at rates below conventional inter- est rates. Since making its first loan in 1970, MassHousing has pro- vided more than $6 bil- lion to finance more than 60,000 apartments and 40,000 home mortgages throughout the state. Profile Mixed-income developments with all market-rate units (such as a master-planned community with a range of price points) usually rely on conventional financing. However, mixed-income housing developments containing assisted units can draw on many sources of financing––and may in fact have more options than market-rate housing. Because additional funding comes from government sources layered with conventional sources, financing generally is more complex in a development with assisted units. Financing tools for mixed-income housing may include tax-exempt bonds, low- income housing tax credits, housing trust funds, tax increment financing, and revolving loan funds. These supplemental funding sources typically have regulatory and reporting requirements and often operate on annual cycles that govern when money is paid out. The federal government sponsors the following pro- grams that can help support the development of mixed-income housing:31 • HOME Investment Partnerships Program—a block grant program that provides funds to states and localities on an annual basis. Funds may be used for a variety of affordable housing activities. • Community Development Block Grant Program—provides funds to eligible metropolitan cities and urban coun- ties on an annual basis. Emphasis is on use of funds to benefit low- and moderate-income families. • Community Development Block Grant Program/Section 108 Loan Guarantees—enables state and local gov- ernments to obtain federally guaranteed loans that can be used for a variety of housing and community development activities. Myth #6 Financing for mixed-income housing developments is unavail- able or hard to come by. Fact #6 There are many sources of financing to support the devel- opment of mixed-income housing. Avalon Oaks, in Wilmington, Massachusetts, is a 204- unit mixed-income development with 41 units set aside for low-income families. MassHousing financed Avalon Oaks in 1998 with a $17.8 million permanent loan. The project’s developer was AvalonBay Communities, Inc. GR E I G C R A N N A