MassHousing Named Finalist for Two Rosoff Awards

MassHousing has been named a finalist for two Rosoff Awards for the Agency's programs that foster the use of minority and women-owned businesses and for a school mentoring program in Boston.

The awards—which are presented by The Ad Club to companies with meaningful diversity, mentoring and inclusion programs—are named after Arnold Worldwide founder Arnold Z. Rosoff, who made it his mission to increase the focus on workplace diversity after he founded his company in 1946.

MassHousing was a finalist—along with Google and Babson College—in the External Diversity Initiative award category for the Agency's Minority-owned Business Enterprise (MBE) and Women-owned Business Enterprise (WBE) utilization program, which gives minority and women-owned firms the opportunity to benefit from MassHousing-generated business opportunities. Babson College was named the winner in this category.

MassHousing works with real estate developers, general contractors and property managers to establish goals for MBE/WBE participation. In fiscal year 2012, MassHousing had 18 projects under construction, representing $250 million in total awards. Of this, $53.6 million (21.4%) were awarded to MBEs and $37 million (14.8%) were awarded to WBEs. The more than 500 developments in MassHousing’s rental housing portfolio expended a total of $187 million for supplies, equipment and services. Of this amount, $37 million (19.6%) were attributed to MBE expenditures and $23 million (12%) to WBE expenditures.

MassHousing was also a finalist for a Rosoff Mentor Award for the Agency's Striving Toward Academic Recognition and Respect (S.T.A.R.R.) Mentor Program, a unique 23-year-old partnership between MassHousing and the Quincy Dickerman Elementary School in Dorchester. The program originated in response to a school administrator's call for role models and volunteers for the students, many of whom live in or near MassHousing-financed developments in the neighborhood. In 2009, the S.T.A.R.R. Mentor Program moved to the Martin Luther King Middle School, which merged with the Dickerman School. MassHousing staff mentor students beginning in the third grade until they reach the fifth grade.

Since its inception, more than 300 students have participated in the S.T.A.R.R. Mentor Program and MassHousing mentors come from all levels and departments in the Agency’s organization. Each school year, eight to 10 mentors volunteer to work one day a week with students in the classroom to raise their levels of aspiration and academic achievement. An additional eight to 10 MassHousing mentors also volunteer on weekends to take students on field trips and provide special learning projects to augment students’ learning and social skills.

Trade Fair Aims to Connect MBEs/WBEs with Opportunities

More than 400 people attended MassHousing's 23rd Annual Greater Boston Minority and Women Business Enterprise Trade Fair, which was held April 25 in Randolph. This year, 122 minority- and women-owned businesses showcased their goods and services to the more than 300 representatives from property management companies, general contractors and state and local government offices.

From left, Supplier Diversity Office Executive Director Reginald Nunnally; MassHousing Compliance & Diversity Department Manager Bernard Brown; and MassHousing Executive Director Tom Gleason at the 2013 Greater Boston MBE/WBE Trade Fair

MassHousing is committed to providing minority and women-owned businesses with equal access to the economic opportunities created by our work, and the trade fair is one way in which we pursue that goal. We work closely with property management companies and general contractors at MassHousing-financed rental developments to set and achieve goals for utilizing minority- and women-owned businesses. And we host workshops to help MBEs and WBEs improve their marketing, business development and operations.

The results speak for themselves. Thus far in the 2013 fiscal year (which ends June 30), $227.3 million in construction contracts have been awarded at 16 MassHousing-financed-projects; $34.9 million (15.4%) has gone to MBEs and $22.7 million (10%) to WBEs. Of the $187.5 million in maintenance/operational expenditures at MassHousing rental communities in FY 2012, $36.7 million (19.6%) went to MBEs and $22.6 million (12%) to WBEs.

Learn more about our programs to provide equal opportunities for minority and women businesses.

Linwood Mill Honored with Historic Preservation Award

Congratulations to Linwood Mill in Northbridge, which was recently honored with a 2013 Massachusetts Historical Commission Preservation Award.

Linwood Mill in Northbridge

The 75-unit Linwood Mill was the result of the preservation and adaptive reuse of a 19th Century textile mill on the Mumford River in Northbridge. MassHousing provided $2 million for the project (with an additional $1 million from the Affordable Housing Trust Fund), which was developed by EA Fish and is managed by Peabody Properties. We should also mention the great care taken by The Architectural Team, Dellbrook Construction and Western Builders to preserve many features of the 134-year-old property.

In his letter announcing the award, Massachusetts Secretary of the Commonwealth William Galvin wrote, "The careful rehabilitation of Linwood Mill demonstrates a strong commitment to historic preservation that goes well beyond what is normally expected."

Home Ownership Lending Passes $1 Billion for FY'13

MassHousing has already surpassed the $1 billion mark and set a record for Home Ownership lending in FY'13. And the fiscal year doesn't end until June 30.

As of April 30, the Agency has provided 4,568 loans for $1.053 billion to help Massachusetts families buy a home or refinance an existing mortgage. That total far surpasses the previous record for Home Ownership lending in a fiscal year, set in FY'12, of 2,599 loans for $569.9 million. In fact, it even bests our record for overall FY lending by the Agency (Home Ownership + Rental Housing) of $967.8 million (also set in FY'12).

The bulk of our Home Ownership lending has come in the form of the MassHousing Mortgage with No MI. Like all MassHousing loans, the No MI Mortgage requires a downpayment of only 3% and features affordable, fixed interest rates and no hidden fees. But unlike the traditional MassHousing Mortgage, borrowers making downpayments of less than 20% are not required to pay mortgage insurance premiums. This considerable savings helps increase a consumer's buying power and makes homeownership more affordable over the long term.

While the MassHousing with No MI garners the most attention, we continue to offer our standard MassHousing Mortgage, which requires mortgage insurance if a borrower puts less than 20% down. However, unlike traditional mortgage insurance, loans insured by MassHousing include MI Plus, a unique borrower protection that helps pay the mortgage in case of job loss.

We've written previously about our financing for rental housing, as well as the impact our Home Ownership lending has on the Massachusetts economy. We're both proud of and excited by what these lending numbers mean, and we can't wait to see the final tallies.

 

MassHousing Rental Lending: Closings continue, largest-ever transaction on the horizon

We recently announced the closing of $18 million in financing for Voke Lofts, the conversion of a former school building into 84 units of affordable housing. Voke Lofts is the seventeenth development MassHousing has financed in the 2013 fiscal year, which ends June 30, and more are on the way.

Thus far in FY 2013, MassHousing has closed a total of $143.7 million in financing to create or preserve 1,585 units at 17 developments. This includes three loans for more than $20 million to create 205 new units of affordable rental housing, and $124 million to preserve the affordability of 1,380 units at 14 existing rental communities. Among the projects is the second phase of the redevelopment of Old Colony in South Boston, one of the oldest public housing communities in the country and the most distressed in the city of Boston, which received a total of $33.4 million in MassHousing financing.

And our rental lending pipeline suggests that even more closings are forthcoming. MassHousing is working to finalize more than $255 million in financing to create or preserve more than 2,100 rental units at a number of communities across the Commonwealth. Most notable of these developments is the preservation of the 967-unit Georgetowne Homes in Boston's Hyde Park neighborhood, which would be the largest ever transaction in MassHousing's history.

Said Monte Stanford, MassHousing's Director of Rental Lending, "Preserving and increasing the stock of quality affordable rental housing is key to the Massachusetts economy. We've accomplished quite a bit on that front both this year and throughout MassHousing's history. But we know there's more work to be done."

Why MassHousing?

Why should homebuyers choose a MassHousing loan? We recently put together a brief video in which our Executive Director, Tom Gleason, explains just that. Have a look:

 

The Economic Impact of a MassHousing Mortgage

Housing is frequently mentioned by government leaders and economists as a critical component of our economy. Indeed, when someone borrows money to purchase or refinance a home, it sets in motion a whole host of events that lead to economic activity and jobs. In our most recent annual report, we developed an infographic to help illustrate the economic benefits of MassHousing's home mortgage loans.  

We're pleased to be able to share it with you here. (For a larger version, click on the image below.)

Fewer Entry Level Buyers? Not at MassHousing

A well respected, nationally syndicated, columnist recently wrote that first-time homebuyers now represent a smaller percentage of the homebuying public. He cited statistics showing that first-time homebuyers as a percentage of all homebuyers have recently declined from 40% to between 30% and 35%, with a measurable downward trend in recent months. He went on to cite as reasons higher unemployment in the first-time homebuyer demographic; young people with unprecedented levels of student loan debt; tighter mortgage lending standards; and stiff competition from investors for affordably priced homes.

It was a decidedly gloomy assessment.

But here at MassHousing, we see the first-time homebuyer statistics as a glass that is half full.

Historically, first-time homebuyers have represented a fairly constant number within the homebuying population. Unlike existing homeowners, first-time buyers are unencumbered; that is, they don’t need to sell a house before they can buy another one. As such, the number of first-time buyers as a percentage of all homebuyers rises when home sales slow and homeowners are unable to sell their homes and move up. Conversely, when sales get hot the number of move-up buyers selling their homes goes up, and the number of first-time homebuyers as a percentage of total homebuyers goes down.

The article failed to mention a couple of important points.

First, it is worth remembering that the number of first-time homebuyers peaked right before the real estate market collapsed in 2008, when exotic and subprime mortgage loans were all the rage and buying a home was easy. Since the days of easy money are over, it stands to reason that we are no longer at peak performance for first-time homebuyer purchases.

Second, home sales activity has been increasing steadily over the past year. The result is that more existing homeowners are able to sell their homes and move up (or down in the case of aging baby boomers). As move-up buyers increase, the percentage of first-time homebuyers as a percent of the total market will decline. This occurs naturally in an improving seller's market. The article supports this fact by citing the increasing number of investors buying properties, which in turn frees up homeowners to buy their next home. Increased investor activity and move-up homebuyer activity are signs of a strengthening market.

The high unemployment rate and massive levels of student loan debt to which the author alludes have an undeniable effect on the homebuying psyche of twenty-somethings approaching the prime of their homebuying years. But as the economy improves (and it is improving) jobs will open up, incomes will rise and the result will be improved consumer confidence among recent college graduates.

But the truth is that first-time homebuyers and recent college graduates do not always share the same socio-economic profile. First-time homebuyers are, now, typically older, married, with young families. They are often recent immigrants or second generation Hispanic, Asian and European families. They are the backbone of America’s working class.

Once thought to be perpetual renters, these buyers are today financially stronger, better prepared and better educated. While they are a smaller percentage of the total population their numbers are growing. They will also benefit from the lessons learned from the mortgage crisis. They will not be victims of predatory lenders and "fool's gold" mortgage products.

How do we know this? In 2012 MassHousing had a record lending year, making over $1 billion in loans to predominantly low- and moderate-income customers. They are eager to become homebuyers and are attending homebuyer education classes in record numbers, leaving them better prepared and more qualified than homebuyers just a few years ago.

While conventional wisdom suggests that it’s never been harder to get a loan than it is today, consider this: In the 1970s the minimum downpayment was 10%. Maximum total debt ratios were 33% not 43%. Minimum credit standards would equate to today’s 720 credit score (perfect credit history for two years, and one or two 30-days late in the past three years). First-time homebuyers represented between 20% and 25% of the total homebuying population.

Today our credit standards aim to cap debt at below 43% (with 41% being a more desirable number) and we require a minimum 680 credit score. But MassHousing is still making loans to borrowers with as little as 3% down. We even have a 30-year, fixed-rate mortgage, with no MI with interest rates in the 4s. And we are making record levels of mortgages to first-time homebuyers. Most importantly our delinquency rates and foreclosures are low.

Our borrowers are experiencing exceptional levels of homebuying and homeownership success. If you are a MassHousing borrower the glass isn't just half full, it is overflowing.

Five senior MassHousing positions filled by housing and finance professionals

MassHousing Executive Director Tom Gleason recently announced that five senior management positions at MassHousing have been filled. All of the new staff members have many years of housing and finance experience and we are thrilled that they have joined the MassHousing team:

Tim Sullivan has assumed the position of Deputy Director for Finance and Rental Programs. Tim most recently served for 15 months as Acting Director of Rental Lending. He was MassHousing's Chief Financial Officer for nine years prior to that. Before he joined MassHousing Tim was the Budget Director for the Commonwealth of Massachusetts.

Monte Stanford is our new Director of Rental Lending. Prior to joining MassHousing Monte ran his own Maryland-based consulting business dealing with federal housing agencies and regulators. He has also worked at PricewaterhouseCoopers where he was senior consultant for mortgage finance and securitization; FannieMae where he was Manager of Multifamily Public Finance; and an internet start-up that focused on federal fiduciaries, as well as state and local housing agencies.

Peter Milewski has assumed the role of Director of Home Ownership Lending. Peter has been the Director of MassHousing's Mortgage Insurance Fund since 1999 and has a career in the mortgage insurance and mortgage origination business spanning 42 years.

Kevin Mello, another MassHousing veteran, has assumed the role of Director of Home Ownership Servicing & Operations. Kevin is a 30-year veteran of the lending and servicing industry and has been with us at MassHousing since 1993.

Finally, on April 1 Karen Kelleher will become MassHousing's General Counsel. Karen most recently served for 12 years as Senior Vice President and General Counsel at The Community Builders, Inc. (TCB), a nationally-recognized non-profit housing developer and manager. Earlier in her career Karen worked as an attorney at Nixon, Peabody, LLC and also at the U.S. Department of Housing and Urban Development.

Minority and Women Business Trade Fair

Registration is now open for MassHousing's 23rd Annual Greater Boston Minority and Women Business Enterprise Trade Fair, which will be held Thursday, April 25 in Randolph.

The event provides an opportunity for minority- and women-owned business enterprise (MBE/WBE) owners to connect with the representatives from property management companies, general contractors, developers, government agencies and others in attendance. Last year, 121 MBEs and WBEs exhibited their businesses to more than 500 attendees at the Greater Boston event. MassHousing also hosts a Western Mass. Trade Fair in November.

MassHousing trade fairs are one way in which the Agency works to ensure that minority- and women-owned businesses share in the economic opportunities created by the rental housing communities we finance and oversee. Our staff works closely with general contractors and property management companies to set and achieve goals for MBE and WBE utilization. We also host workshops and other events to help MBEs and WBEs better their marketing, business development and operations.

Learn more about our programs to promote diversity. Or, register for the trade fair today.