MassHousing Blog

Another record lending year

We've crunched the numbers and fiscal year 2012, which ended June 30, was MassHousing's best lending year ever. It was the fourth time in six years we set a record and was 21% above our FY'11 total.

The tally for FY '12 was $965.7 million. We're very proud of this number, especially given the tremendous need for affordable mortgages and apartments in the wake the housing downturn, as well as the particular challenges of the current market.

A big chunk of the lending was for affordable homeownership. We closed $570 million in loans to help 2,599 borrowers buy or refinance a home. We provided an additional $20 million in the form of insurance for 93 affordable non-MassHousing loans. The big story of the year was the huge popularity of our "no-MI" (no mortgage insurance required) loan with minimum downpayments of just 3%.

MassHousing provided another $334.4 million to finance the construction of 470 new apartments and to rehabilitate and preserve affordable rents at 2,698 existing units. An additional $40.3 million in loans came from the Affordable Housing Trust Fund and will support 2,076 units of housing – some rental, some homeownership – for elders, families and residents with special needs.

That's a lot of numbers, but the bottom line is we sent more dollars out into the Commonwealth for affordable housing than ever before in our 46-year history. Those dollars not only helped thousands of people buy a piece of the American dream or find a decent apartment but also contributed to the recovery of the housing market and to the overall Massachusetts economy.

Whether you are a customer or a partner, we thank you for being part of a landmark year. We're hoping to do even greater things in the future.

Home Ownership Lending Continues Torrid Lending Pace



MassHousing's Home Ownership Division is providing affordable home mortgage loans at more than triple its previously normal rate, putting the Agency on pace to crack the $1 billion lending mark in calendar year 2012. Consider the following:

• Through September 21, MassHousing closed 3,192 first mortgage loans for $747 million.
• At the same time last year, the Agency had closed 942 loans for $191.3 million.
• In the third quarter of calendar year 2012, we closed more loans (1,399 loans for $329.9 million) than in all of 2011.
• We've already provided more loans for more dollars in 2012 than we did in the previous two calendar years combined.

The increased output of Home Ownership lending has been fueled by MassHousing's No-MI mortgage loan, which we unveiled in January 2012. Like a traditional MassHousing loan, the No-MI product features competitive, fixed interest rates; 30-year repayment terms; low downpayment requirements; and no hidden fees or other surprises. But unlike the traditional MassHousing loan (which features a slightly lower interest rate than the no-MI loan), borrowers making downpayments of less than 20% are not required to purchase mortgage insurance. This savings makes homeownership more attainable, affordable and sustainable for Massachusetts families, something the numbers prove. The massive surge in loans has helped to quell a few lingering misconceptions among some in the real estate and lending fields who suggested that too few borrowers qualify for our programs.

Even with the popularity of the No-MI product, loans insured with MassHousing's innovative MIPlus mortgage insurance are still favored by one in four borrowers. The supplemental unemployment benefit protection of MIPlus provides a valuable safety net for homebuyers. A traditional MassHousing loan—with a low interest rate and low-cost MI with the added benefit—is priced very attractively for borrowers making downpayments of 10% or more.

You can learn more about MassHousing's catalog of affordable loan products for homebuyers and homeowners. And be sure to stay tuned for more information on our drive to $1 billion.

Record Lending Deal Moves Forward

MassHousing's Board of Directors recently approved a $163.3 million financing package for the acquisition, rehabilitation and preservation of affordability at Georgetowne Homes. Once closed, the loan would amount to the largest ever transaction provided by the Agency.

Georgetowne Homes is a 967-unit family housing community originally developed in the late '60s and early '70s in Boston's Hyde Park neighborhood. The project is comprised of 121 one-bedroom units, 800 two-bedroom units and 46 three-bedroom units housed in 68 two- and three-story townhouse and walkup buildings located on a 62-acre site.

Currently, 681 units (70.4%) are subsidized by two Section 8 contracts. The project developer, an entity related to Beacon Communities, has renewed the two Section 8 contracts for 20 years to ensure the long-term affordability of Georgetowne Homes. As part of the loan closing, the developer plans to reserve 90% of the units (870) as affordable for households earning no more than 60% of the area median income. In addition, the financing will help rehabilitate all 967 units at Georgetowne Homes, improve the property's energy efficiency and increase the number of handicapped accessible apartments.

While terms, amounts and conditions sometimes change between loan commitment and closing, the Georgetowne Homes loan should far eclipse the Agency's previous record financing for a single development ($151 million for Harbor Point in 1986). We'll certainly be posting more information on Georgetowne Homes in the months ahead.

Old Colony Recognized Among Nation's Best

Congratulations to Beacon Communities of Boston for The Homes at Old Colony in South Boston being chosen as the winner of the urban category in Affordable Housing Finance magazine's 2012 Readers' Choice Awards for the Nation's Best Affordable Housing Developments.

The award will be presented in November at the Fairmont Millennium Park in Chicago.

MassHousing closed nearly $28 million in financing for Phase One of the Old Colony redevelopment and has committed nearly $33 million in financing for Phase Two of the project.

 

Beacon Communities has completed Phase One which replaced seven distressed and blighted apartment buildings with 116 new apartments for low-income families in one mid-rise building and four clusters of town homes. Phase One also included the construction of a new 10,000-square-foot community center.

Originally constructed in 1940, the 840-unit Old Colony development is one of the oldest federal public housing developments in the country and is currently the most distressed property owned by the Boston Housing Authority. It will be redeveloped over multiple phases.