204-unit housing community had affordability extended in 2014 resulting from previous MassHousing financing
An affiliate of Connolly and Partners, LLC refinanced Spring Gate with MassHousing's loan program through the Federal Financing Bank (FFB). The FFB program resulted from a partnership established in 2015 with the U.S. Department of the Treasury, the U.S. Department of Housing and Urban Development (HUD), and state Housing Finance Agencies (HFAs) including MassHousing.
That partnership, in which the FFB purchases a 100% participation interest in the loan that is 100% insured by HUD, provides lower interest rates on loans to owners of subsidized rental housing, giving them new incentives to refinance, make capital improvements and lock in long-term affordability for lower-income residents.
Among the renovations planned for Spring Gate are accessibility improvements, apartment interior upgrades, exterior and common space renovations, site paving, and security improvements.
In 2014, the property owner borrowed $1.2 million from MassHousing to help pay off ("pre-pay") the remaining balance on the loan made when Spring Gate was built in 1973 under the federal subsidy program known as "Section 236."
That transaction allowed the owner to participate in a new HUD initiative called the Rental Assistance Demonstration program, or RAD. By participating in RAD, the owner was able to continue to provide below-market subsidized rents to the residents because the apartments transitioned from an older and obsolete subsidy program (known as "Rent Supp") to a replacement subsidy known as "Project-Based Vouchers."
The owner committed to these Project-Based Vouchers for 15 years, meaning tenant rents will remain affordable and below-market for income-eligible residents.
"Connolly and Partners was committed to maintaining the Spring Gate Apartments as an affordable housing resource in Rockland and now that this second transaction has been completed the property will receive significant upgrades," said MassHousing Executive Director Timothy C. Sullivan.
The Spring Gate Apartments are comprised of 56 one-bedroom apartments, 93 two-bedroom apartments and 55 three-bedroom apartments in 33 three-story buildings at 52 Hannah Way in Rockland.