MassHousing Blog

MassHousing Now Publishing Content with AllRegs

By Tom Farmer
Corporate Communications, MassHousing

MassHousing is now publishing content on AllRegs, the leading information provider in the mortgage industry. The Agency will leverage AllRegs' technology platform and publishing expertise to manage and maintain its policies, procedures and guidelines, and to more efficiently provide information to lenders amidst the changing world of mortgage lending.

"The world of mortgage lending and affordable housing is always changing and evolving," said Peter Milewski, MassHousing's Director of HomeOwnership Lending. "AllRegs is a dynamic tool that allows us to provide information to our lenders more efficiently than ever before. We expect that this is just the beginning of our relationship with AllRegs. They will be a partner going forward as we introduce new loan programs that help us to achieve our mission of making affordable loans available to homebuyers with modest incomes."

The MassHousing Seller Guide is available in the MassHousing Lending Library accessible to visitors of emasshousing.com, the Agency's lender extranet. Users that subscribe to the AllRegs flagship product, the Single-Family Lending Package, can also access the content through the State Housing Finance Agency section of Agency Guidelines.

Users will benefit from a variety of productivity tools, including an electronic table of contents with links to guidelines and a robust search engine that features a thesaurus with industry jargon and relative matching results.

In addition, the MassHousing Library features an Announcement Summaries section to notify users of changes to content—delivered via e-Alerts—and an email feature to share content with colleagues.

"We at AllRegs are excited to work with MassHousing to publish their guidelines through our proprietary technology," says Dan Thoms, Executive Vice President of AllRegs. "Further, their content is a valuable addition to our library of mortgage industry content for our Single-Family Lending Package subscribers."
Introduced in 1989, AllRegs is used by virtually all of the top 100 home mortgage lenders as well as numerous governmental agencies, including Fannie Mae, Freddie Mac, the Federal Home Loan Banks, FHA, VA, RHS and Ginnie Mae.

AllRegs is the exclusive electronic publisher of the Fannie Mae and Freddie Mac Single and Multi-Family Seller/Servicer Guides and The Federal Home Loan Banks' MPF Program Guidelines. Products include single and multifamily underwriting and insuring guidelines as well as federal compliance laws and regulations, state compliance laws and regulations with plain-language analyses, contract publishing services, policy manuals and a library of historical guidelines. The educational division, AllRegs Academy, offers virtual and live training, as well as designation and practical guides. The Professional Services Group develops custom guides, policy manuals and other documents on a contract basis.

MassHousing Receives Issuer Rating Upgrade from Moody's Investor Service

By Tom Farmer
Corporate Communications, MassHousing

Moody's Investor Service has upgraded MassHousing's issuer credit rating to Aa3 from A2, citing the Agency's strong financial performance and management.

"The upgrade to Aa3 reflects the Agency's strong financial performance, strong portfolio performance, the single family and multifamily portfolio compositions which include a substantial and growing percentage of government insured loans, as well as MassHousing's conservative bond profile and very strong management," Moody's said in announcing the upgrade.

In making the upgrade, Moody's cited MassHousing's solid asset to debt ratio; solid combined fund balance of $1.02 billion as of June 30, 2013; strong portfolio performance as evidenced by seriously delinquent single family loan rate of (only) 1.55%; as well as multifamily delinquency rates of less than 1% as of June 30, 2013.

Moody's additionally cited MassHousing's "active oversight of all projects and redevelopments which has minimized losses due to foreclosures and defaults of loans within the bond program."

"We believe the rating upgrade is a validation of the hard work our financial and asset management teams have done over the last several years," said MassHousing Executive Director Thomas R. Gleason.

"The upgrade from Moody's is yet another indicator that we are well-positioned to finance the affordable housing that is so important to our Commonwealth's economic vitality."

Moody's also noted that MassHousing had a record lending year in fiscal 2013 totaling $1.6 billion, surpassing its previous record in 2012 of $1 billion.

Read the Moody's announcement.

MassHousing Awards $290,000 for Affordable Sober Housing

By Tom Farmer
Corporate Communications, MassHousing

MassHousing recently awarded $290,000 to support sober housing programs in Boston, Dartmouth, Norton and Worcester.

The MassHousing grants will come from the Center for Community Recovery Innovations, Inc. (CCRI), a nonprofit subsidiary corporation of MassHousing that supports nonprofits that create or preserve affordable sober housing in Massachusetts for recovering substance abusers. CCRI to date has awarded more than $7 million in grants for more than 1,600 units of substance-free housing in nearly 40 communities for men, women, families, veterans, the homeless and ex-offenders.

"There is a critical need for affordable sober housing in Massachusetts and these CCRI grants play an important role in completing the financing necessary for these projects," said MassHousing Executive Director Thomas R. Gleason. "Having an affordable place to live in a sober environment is a major first step in the recovery from addiction."

Receiving grants in the latest round of CCRI funding are:

• New England Center for Homeless Veterans, Boston, $75,000 to help create 35 new efficiency apartments for formerly homeless veterans.
• Partners in Housing, Dartmouth, $75,000 to help create nine new efficiency apartments for homeless and at-risk veterans in the former State Police barracks, now named the O’Connor-Sisson House.
• North Cottage Program, Inc., Norton, $75,000 to help create five new units of affordable sober housing for men. Three of the units will be accessible to disabled residents.
• Dismas House of Massachusetts, Inc., Worcester, $65,000 to increase energy efficiency through solar power for 12 units of affordable sober housing.

The Center For Community Recovery Innovations, Inc., issues an annual Request for Proposals (RFP) to solicit projects for funding. The proposals that are selected need to meet CCRI's current priorities and eligibility categories. Grants are typically used as one-time gap funding for capital projects that increase or improve the stock of affordable sober housing in Massachusetts. Other proposals that provide services for residents in MassHousing-financed rental housing, specifically those that address alcohol and/or drug abuse or addiction, are also considered for funding. CCRI grant recipients must be 501c3 non-profit organizations and matching funds must be provided. All proposals and applicant qualifications are stringently reviewed and vetted by MassHousing.

Community Services Conference to Tackle Hoarding

Using a Team Approach to Address Hoarding in Affordable Housing, the 2014 Community Services Conference, will be held April 2, 2014 in Marlborough. The event, which is being held in partnership with the Statewide Steering Committee on Hoarding, will bring together experts in the field of hoarding, staff of rental housing communities, service providers, local and state public health officials and others to discuss strategies for identifying, understanding and addressing hoarding.

In addition to the conference, MassHousing is also hosting a special training on Hoarding on April 3 in Marlborough.

"MassHousing continues to be a leader in helping people understand and address hoarding, both in Massachusetts and across the country," said MassHousing Community Services Manager Tom Lyons. "Among other things, our 2007 conference on the subject resulted in the formation of the Statewide Steering Committee on Hoarding. I’m excited to see what comes out of the 2014 events."

Each year, Community Services conferences address a topic of particular concern to affordable rental housing communities. Past events have covered substance abuse, violence prevention, aging in place and serving youth in housing.

Learn more and register for the conference and/or the training at www.masshousing.com/conference.

Online Counseling Helps Empower More Homebuyers

A new and improved version of online homebuyer counseling is helping to equip more potential buyers with important information as they pursue the dream of homeownership.

The curriculum, which was produced by MassHousing, is now being offered through 30 partner nonprofit organizations across the Commonwealth. More nonprofits are expected to adopt the curriculum soon.

MassHousing has long believed that formal homebuyer education is a vital step in the homebuying process, going so far as to making it a requirement to obtain a MassHousing Mortgage. In the past, homebuyer counseling only occurred in person, with homebuyers attending classes scheduled by nonprofits. But scheduling often made it difficult for buyers to attend classes, which in turn created an obstacle for obtaining a MassHousing loan.

The online option helps to remedy that. Though the curriculum is similar to what a buyer might experience in-person, they are able to take the course as their schedule permits. The online course is roughly six hours long, includes animations, interactive worksheets and quizzes that keep the student engaged.

"Homebuyer education is an absolutely essential step along the path to successful homebuying and homeownership," said Mortgage Insurance Fund Director Peter Milewski. "This online option is another step MassHousing has taken toward making our affordable loan products accessible to more Massachusetts homebuyers."

New regulations will not impact MassHousing lending

New lending regulations that went into effect recently will not result in any changes to MassHousing’s homeownership products or guidelines.

On January 10, a number of regulatory changes affecting the mortgage lending industry took effect. These included rules defining how lenders determine a borrower's Ability to Repay (ATR) and therefore obtain a mortgage, as well as the definition of a Qualified Mortgage (QM). Housing finance agencies like MassHousing are exempt from these changes, however.

There is much speculation about what these changes will mean for the mortgage industry. Some fear that it will become harder to get a mortgage, particularly for low- and moderate income homebuyers, which will hinder the recovery of the housing market and the economy as a whole.

The rules aim to ensure that borrowers understand the loan they're getting, and that lenders don't make loans that can't be repaid. To be considered a qualified mortgage, a loan cannot require excessive fees or have a term longer than 30 years. Also, interest-only and negative amortization loans are not qualified mortgages.

The new rules reflect what MassHousing has believed for quite some time: that plain vanilla, 30-year, fixed-rate loans, reasonable borrower qualifications and careful underwriting are the foundations of responsible lending and sustainable homeownership. It's a reason why our delinquency and foreclosure rates remain below industry averages, and why our pace of lending remains brisk.

Introducing the AMR

By Christopher Burns
Senior Portfolio Manager, MassHousing

For the first time in well over a decade, MassHousing’s Rental Management Division is revamping the Property Management Review (PMR), the tool used by staff to conduct annual physical inspections and to evaluate management agent performance at MassHousing-financed developments.

The new Asset Management Review (AMR) reflects a different approach to how the Department manages assets. While the traditional PMR was a standardized one-size fits all approach to conducting a review, the AMR focuses on site-specific issues. Rather than reviewing a management agent's general systems and procedures, the AMR examines external factors, including market conditions, and objective data, such as a development's year-to-year financial performance.

Observations are based on a development's ability to operate in the context of financial performance. Financial constraints are weighed in assessing a management agent's performance, rather than measuring agents against general (and often subjective) expectations. One of the primary goals is to provide information that is useful to both the management agent and the owner by examining issues like cost containment and risk management.

Embracing Technology

Unlike the PMR, the AMR is conducted using a tablet. The tablet-based review is enabled with drop-down and multi-select features. Worksheets guide the review based on property-specific information and perform automatic calculations. Observations made on worksheets automatically populate within the AMR report, eliminating the need for staff to re-enter or transcribe data from the worksheet to the review form. For management agents, this will result in a noticeably more efficient review.

These changes represent just a few of the steps taken in the department to be more responsive to our business partners.

MassHousing Closes $63 Million in Loans for Affordable Housing Communities in Boston, Fall River, Lowell, Pittsfield and Webster

By Tom Farmer
Corporate Communications, MassHousing

As 2013 came to an end MassHousing was a beehive of activity, closing approximately $63 million in loans for affordable housing communities in Boston, Fall River, Lowell, Pittsfield and Webster.

The financing involves 490 apartments; affordability will be preserved for 271 of those units and the remaining 219 units will be new production.

MassHousing closed $33 million in loans for the acquisition and renovation of the 146-unit Historic South End Apartments in Boston (news release). The Historic South End Apartments are being completed by The Community Builders (TCB) of Boston. In conjunction with the financing, TCB has received approval to extend the Section 8 Housing Assistance Payment contracts on all 146 apartments for an additional 20 years.

The Historic South End Apartments in Boston

Three South End apartment communities are being combined to form the Historic South End Apartments. TCB owns the 83-unit Dartmouth Apartments and 31-unit Project III apartments and will acquire the 32-unit Ebenezer Homes.

"The Historic South End Apartments are an important source of affordable housing for residents of the South End and this financing will ensure that these apartments remain affordable for at least another 20 years," said MassHousing Executive Director Thomas R. Gleason.

As part of MassHousing's financing, substantial improvements will be made to the properties and the work is expected to be completed by the end of 2014.

"The Community Builders has been part of Boston's South End for nearly 50 years. We are pleased to partner with MassHousing on our newest investment in the neighborhood," said TCB President and CEO Bart Mitchell. "Residents of the Historic South End Apartments will enjoy continued affordability, along with new systems to make their homes safer and more comfortable."

The contractor will be CWC Builders. The management agent is The Community Builders and the architect is Davis Square Architects.

MassHousing closed $7.1 million to preserve affordability for senior citizens at the 125-unit Tecumseh Mill in Fall River (news release).

Tecumseh Mill in Fall River

As a condition of the MassHousing financing, property owner Tecumseh Holdings LLC will extended the HUD Section 8 Housing Assistance Payment (HAP) contract and the affordability on 124 apartments for 20 years when the current HAP contract expires on March 1. One of the building's apartments is occupied by a resident superintendent.

Tecumseh Mill was built in 1866 as a steam-powered cotton mill. It was converted in 1984 into an affordable apartment community under the HUD Section 8 Program. The property was refinanced through MassHousing's Section 8 Proactive Preservation Program, which seeks to extend affordability at MassHousing-financed developments where MassHousing mortgages are due to mature and Section 8 HAP contracts are due to expire. The original MassHousing loan matures on March 1.

"Tecumseh Mill is a well maintained and operated housing community and this loan closing will extend affordability for the senior citizens who live there for many years to come,'' said Gleason.

"We are so pleased that MassHousing approached us with their Proactive Preservation Program. It was the perfect solution to keep this beautifully renovated historic mill building in tip-top shape, and available to residents at affordable rents. We could not have asked for a better result," said Paul Clayton, General Partner of Tecumseh Holdings LLC.

MassHousing closed $8.9 million in financing for the renovation and preservation of affordability at the 101-unit Central Annex Apartments for elderly and disabled residents in Pittsfield (news release).

Central Annex Apartments in Pittsfield

Preservation of Affordable Housing (POAH) of Boston, which owns the Central Annex Apartments, has renewed the Section 8 Housing Assistance Payment contract on all 101 apartments, which will keep them affordable for at least the next 20 years. POAH also plans to make substantial renovations to the property.

"Central Annex has been a valuable affordable housing resource in Pittsfield for many years and this financing will not only keep the development affordable long into the future, but it will also result in the property receiving a substantial renovation for the benefit of the senior citizens and disabled residents who live there," said Gleason.

The MassHousing financing includes a $5.4 million construction permanent loan and a $3.5 million bridge loan. An additional $1.75 million is being provided from the Affordable Housing Trust Fund, which is managed by MassHousing on behalf of the state Department of Housing and Community Development (DHCD).

Central Annex encompasses two low-rise brick buildings. The first, on Second Avenue, was built as the Central High School in 1898. The other, located on Union Street, started as the Berkshire Hotel in 1905. In 1979, both buildings were converted into housing with MassHousing financing and both are listed on the National Register of Historic Places.

"We are deeply appreciative of MassHousing's support of this project, which will renovate these very special and historic properties in downtown Pittsfield that serve seniors and the disabled. POAH looks forward to making these properties safer and more comfortable for these residents and having MassHousing as a partner in the financing has made it possible," said POAH President Amy S. Anthony.

The contractor will be Keith Construction, Inc. and the architect is Guzman Prufer, Inc. The management agent will be POAH.

MassHousing closed a $2.285 million permanent loan for the acquisition and redevelopment of the 52-unit Counting House Lofts in Lowell (news release). Counting House Lofts is being developed by WinnDevelopment of Boston.

Counting House Lofts in Lowell

Located on Jackson Street in Lowell, Counting House Lofts is part of the Jackson-Appleton-Middlesex (JAM) District, which is part of a plan to reconnect the area to downtown Lowell and the Lowell National Historic Park. Counting House Lofts is a three-story, brick building constructed in 1825 to house the Hamilton Manufacturing Company Storehouse and Counting House.

The building is currently vacant except for the Lowell Community Health Center, which will continue to occupy commercial space in the building and is not involved in the MassHousing financing. The development will feature 52 one and two-bedroom apartments of which 26 will be affordable and 26 will be rented at market rates.

"Counting House Lofts is another important part of the revitalization of downtown Lowell and the development will add more quality affordable housing to the area," said Gleason. "WinnDevelopment specializes in converting underused, historic properties into mixed-use housing and this project will complement other new housing communities in the Jackson-Appleton-Middlesex District."

The project is also receiving $1 million from the Affordable Housing Trust Fund and is expected to be completed in December 2014. The contractor is Dellbrook Construction of Braintree and the architect is The Architectural Team, Inc. of Chelsea. The management agent is WinnResidential of Boston.

"This mixed-use and mixed-income development fits in nicely with the other public investments in the area. Together a vital and lasting community is being solidified along this Jackson Street corridor. WinnCompanies is proud to be actively involved in such progress, and could not have been, without MassHousing's financial support and continued partnership," said Gilbert Winn, Managing Principal of the WinnCompanies.

MassHousing closed $11.8 million in loans for the acquisition and adaptive reuse of the historic Sitkowski School in Webster into 66 affordable apartments for residents age 55 and over (news release).

The Sitkowski School in Webster

The Sitkowski School Apartments is being developed by Neighborhood Of Affordable Housing (NOAH) of East Boston. Built in the early 1900s and expanded in 1920, the three and four-story brick building is located in downtown Webster adjacent to the Webster Town Hall and Webster Public Library. The building has been vacant since 2005.

In addition to NOAH developing the 66 apartments, all of which will remain affordable in perpetuity, Webster's Community Senior Center will be relocated to the gymnasium area of the former school building. The unit mix will include 59 one-bedroom apartments and seven two-bedroom apartments.

The rehabilitation of the Sitkowski School is an important piece of a larger master plan advanced by the Webster Redevelopment Authority to revitalize downtown Webster.

"The Sitkowski School has been vacant and unused for nearly 10 years but now it will be transformed into a valuable affordable housing resource for senior citizens and the town of Webster for decades to come," said Gleason.

The MassHousing financing involves $1.75 million permanent loan, an $8.1 million bridge loan and a $2 million deferred payment loan. The project is also receiving $1 million from the Affordable Housing Trust Fund.

"We are very pleased to have been selected by the Town of Webster to rehabilitate this historic school for use as senior housing and a new Community/Senior Center. We know the town is working diligently to revitalize its downtown and the Sitkowski School is one of the centerpieces of that renewal effort," said NOAH Executive Director Phil Giffee. "The $20 million project will also create more than 100 jobs as it creates great housing options for hard-working seniors in the area."

The project is expected to be completed in May 2015. The contractor is Dellbrook Construction and the architect is DiMella Shaffer Architects of Boston. The management agent is WinnResidential.

Listening Tours Provide Valuable Feedback

By Anne Marie MacPherson
Manager of Portfolio Management, MassHousing

MassHousing Asset Management staff recently completed five "Listening Tours" in Springfield, Worcester, Fairhaven, Boston and Lynn.

The goal of these events was to obtain feedback from our business partners on the policies, procedures and work practices of MassHousing's Rental Management Division. We hope to reduce the burden on management agents and owners by streamlining the way we do business. The meetings served as a forum for the agents to tell us what we do well and where we need to improve.

Prior to organizing the Tour, we met with an external advisory committee to define the key topics for discussion. Each Tour stop covered physical inspections, financial reporting, capital planning, resident relations, training and education, regulatory compliance and communication practices.

We were pleased to see that 85 plus representatives from 29 management companies attended one of the five events. Several themes arose from the events:

• Property managers would like their relationship with MassHousing to be more of a partnership, which would help all parties involved do their jobs better. They felt encouraged by our willingness to come out to the field and meet with them to solicit their thoughts and opinions.
• Attendees were happy to hear that an internal training program for Asset Management staff would be created to help with issues of consistency in implementing policies and procedures across the portfolio. The trainings will include a template for performing AMRs/MORs; audit reconciliations; resident complaints/resolutions; evaluation of capital needs studies; and replacement reserve processing.
• Rental partners welcomed the opportunity to receive training from MassHousing on all of the major policies and procedures so that they can better understand where they need to focus their attention.
• They look forward to regional meetings hosted by MassHousing to discuss EIV, capital planning, AFM plans, rent increases, voucher processing, audit processing, and interfacing with the MassHousing website.

These were the first Listening Tour events we've conducted, but they certainly won't be the last. And of course, we always welcome your feedback. Feel free to contact your asset manager or send feedback directly to me.