MassHousing had its best lending year ever for multi-family housing in fiscal 2016, providing $782.9 million in financing for 40 affordable housing communities with 6,110 apartments.
New loan products with lower interest rates, enhanced customer service and a new pre-payment policy that allows the owners of MassHousing-financed properties to refinance before their original mortgages mature helped spur the record-setting year. The Agency exceeded by 73% its previous multifamily lending volume record of $452.3 million in fiscal 2011.
"MassHousing made a commitment to provide new, borrower-friendly products with better executions for our customers and that is reflected in the record level of financing," said MassHousing Executive Director Tim Sullivan. "There are many housing challenges facing Massachusetts and we will continue to innovate and respond to the ever-changing world of housing finance in order to meet those challenges."
Two new loan products in particular fueled the record level of lending for rental housing by providing interest rates in the low-to-mid 3% range.
The Multifamily Accelerated Processing (MAP)/Ginnie Mae Joint Venture program provides lower interest rates and a faster review process while preserving and extending affordability for hundreds of low-income senior citizens and families. The Agency has partnered with two experienced MAP lenders: CBRE and Rockport Mortgage Corporation.
Another lending platform utilizes the Federal Financing Bank within the U.S. Department of the Treasury. In appropriate transactions, the FFB purchases a 100% participation interest in the loan that is insured by HUD. Such loans provide low interest rates 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.
Overall, the MAP/Ginnie Mae and FFB loan programs accounted for 57% of MassHousing’s rental lending production in fiscal 2016. Twelve loans totaling $262 million were made through the FFB program and 10 loans totaling $183 million were closed through the MAP/Ginnie Mae program.
While many borrowers come to MassHousng for tax-exempt financing that makes 4% tax credits accessible, 75% of our lending this year actually delivered highly competitive rates with taxable loan products. These products provide excellent interest rates and shorter closing timeframes for deals that do not involve tax credits.
