Refinances with $15.8 million under MassHousing program that provides owners of multifamily housing with incentives to keep properties affordable
An affiliate of APT Asset Management, Inc., which owns the 198-unit Essex Towers, refinanced the property through MassHousing’s Multifamily Accelerated Processing (MAP)/Ginnie Mae Joint Venture Initiative with partner lender Rockport Mortgage Corporation.
As a condition of the $15.8 million in MassHousing financing, the owner extended the federal Section 8 Housing Assistance Payment Contract on all 198 apartments for 20 years beyond the current maturity of 2018, through 2038.
"Now more than ever, we need to ensure that our seniors, who are one of our most vulnerable populations, are granted the same opportunities for housing that all of our residents have," said Lawrence Mayor Daniel Rivera, who is also a member of MassHousing’s Multifamily Advisory Committee. "I want to thank MassHousing for their unwavering support in making sure our seniors who reside at Essex Towers are not worried about being able to afford their apartments."
The Essex Towers were built in 1979 and originally financed by MassHousing. The 198 one-bedroom apartments are contained in two nine-story buildings at 18 Franklin St. and 45 Broadway in downtown Lawrence.
The property will also undergo moderate renovations including boiler and hot water tank replacement and elevator refurbishment and modernization.
"It is important to have local support for affordable housing and Mayor Rivera and the Lawrence community were important partners in ensuring that the senior citizens living at Essex Towers will continue to have affordable rents for at least another 20 years," said MassHousing Executive Director Tim Sullivan. "We’re pleased that Mayor Rivera is a member of MassHousing’s Multifamily Advisory Committee and will lend his expertise in creating more housing opportunities for the citizens of Lawrence."
There is a strong need for affordable housing in Lawrence, where U.S. Census data reported that 78.8% of households in the city earn less than the area median income (AMI) of $84,100 and 51.1% earn less than 60% AMI.
There are more than 2,100 Lawrence residents on the waiting list for 1,056 federally assisted housing units and approximately 3,000 residents on the waiting list for 522 state-assisted housing units managed by the Lawrence Housing Authority.
MassHousing has financed or oversees 16 rental communities in Lawrence involving 1,965 units of housing. The Agency has also made 1,315 home mortgage loans in the city involving $117.2 million in financing.
MassHousing offers the MAP/Ginnie Mae loan program to the owners of rental housing through the U.S. Department of Housing and Urban Development. The program provides lower interest rates and a faster review process while preserving and extending affordability for hundreds of low-income senior citizens and families.
As a result of the taxable refinancing, the owner of Essex Towers reduced the interest rate on the loan by more than half from 7.80% to 3.05%. The use of taxable financing also eliminates the need to use Private Activity Volume Cap, which is a scarce public financing resource.
"On behalf of the ownership we are pleased to extend our commitment to affordable housing and the residents of Essex Towers. Working together with MassHousing and Rockport Mortgage provided for excellent execution of financing for the preservation of this vulnerable Lawrence community asset," said Jeff Ewing, President of APT Management Group, Inc.
MassHousing to date has closed 16 loans involving more than $328 million in financing through the MAP/Ginnie Mae program.
"Rockport was pleased to have the opportunity to work with the owner, APT Management, Inc., and MassHousing to complete the refinancing of Essex Towers and to preserve this important affordable asset in the City of Lawrence," said Rob Milanette of Rockport Mortgage Corporation. "The refinancing provided funding for important upgrades to the property and fully funded reserves, while locking in long-term, 35-year financing for the property at today’s low rates."