MassHousing recently adopted guidelines offering certain multifamily borrowers who have prepayment restrictions opportunities to refinance early at today's competitive interest rates. The new MassHousing Proactive Multifamily Preservation and Loan Prepayment Guidelines reflect MassHousing's desire to facilitate certain early prepayments where borrowers refinance with the Agency. We are committed to offering competitive loan products, including taxable and tax-exempt bonds insured under FHA Risk Share, 223(f) or 221(d)(4) programs. We are also able to arrange competitive funding via the AFL-CIO Housing Investment Trust, Fannie Mae and other sources. MassHousing is a MAP lender and Ginnie Mae issuer, and approved to participate in FHA's Tax Credit Pilot Program, which expedites closing on certain LIHTC deals. Interest rates will of course vary with the product and the market, but a loan closing today could have an interest rate of approximately 3.75%.
The Guidelines are targeted at loans with less than seven years remaining before maturity or less than five years remaining before they are eligible for as-of-right prepayment, and describe how transactions will be considered and prioritized. Participating loans that have not passed their statutory prepayment lockout period will still be able to participate under the Guidelines. Such loans are expected to be modified to require a 90% pay down. Proceeds adequate to pay off the remaining 10% would then be escrowed, and the mortgage would be discharged, though the note would remain outstanding and be paid down over time from the escrow proceeds. This strategy will be available to both for-profit and nonprofit borrowers.
Borrowers entering into new loans will need to extend affordability restrictions for at least 15 years. Accordingly, we hope this initiative will ensure preservation of affordability while capturing the favorable terms available in the current market and, in some cases, addressing deferred capital needs. Please contact Monte Stanford to determine whether and on what terms your property can be prepaid and refinanced.
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October 2014
October 31, 2014
October 30, 2014
"13A" – A Preservation Challenge for Massachusetts
By Deborah Goddard
Managing Director, Program and Policy, MassHousing
Modeled after the federal 236 program, the 13A mortgage interest subsidy program was created by the Massachusetts legislature in the 1970’s. The program has faced challenges in the past, but none as significant as the current challenge of preserving this valuable portfolio in the face of expiring mortgages.
In the late 90's, owners started to consider prepayment of their 13A mortgage obligations. After an effort extending over several years by members of the Massachusetts delegation, most especially then Congressman Barney Frank, HUD agreed to extend Section 8 rental enhanced vouchers to low income residents of 13A developments, averting the loss of affordable units.
Starting in 2004, the Commonwealth began reducing its funding commitment to the program and stopped completely in 2009. MassHousing addressed the appropriations gap by picking up the obligation, absorbing over $47 million in shortfall to date. Now, the 13A portfolio faces the expiration of the affordability for the remainder of the portfolio—43 developments that serve a mixed-income population, including just over 5,000 very low income households (30-50% AMI)—over the next 5 years.
In the wake of HUD's recent position that 13A developments are not eligible for tenant protection vouchers upon prepayment of the 13A mortgage, the preservation of the 13A portfolio presents significant challenges to the Commonwealth. A preliminary estimate of the capital cost to preserve the entire portfolio at the current rent standards is upwards of $300 million. At tax credit rents the preliminary estimates indicate that capital costs shrink to under $100 million; however, without vouchers, this scenario is not feasible given the untenable rent increases that would occur.
MassHousing and DHCD have established a 13A Working Group that includes owners, other public partners, preservation experts and tenant advocates to identify the range of options and tools to meet this preservation challenge. The Working Group has adopted the three goals established by DHCD and MassHousing: (1) to the maximum extent possible, preserve the number of affordable units in the 13A portfolio; (2) to the maximum extent possible, preserve the level of affordability provided by the 13A portfolio; and (3) to the maximum extent possible, minimize the disruption to and dislocation of existing tenants.
Updates will be available in the future on www.masshousingrental.com.
MassHousing Executive Director Tom Gleason Elected President of the NCSHA
MassHousing Executive Director Tom Gleason has been elected President of the Board of Directors of the National Council of State Housing Agencies (NCSHA).
NCSHA is a nonprofit, nonpartisan organization created by the nation's state Housing Finance Agencies (HFAs) more than 30 years ago to coordinate and leverage their federal advocacy efforts for affordable housing. NCSHA represents its members in Washington before Congress, the Administration, and the several federal agencies concerned with housing, including the Department of Housing and Urban Development, the Department of Agriculture, and the Treasury, and with other advocates for affordable housing.
"I am honored to be elected by my fellow Directors as President of this very highly effective national organization," said Gleason. "We will be working closely with the federal government and our elected officials to develop and incorporate new and innovative ways to finance single-family and multi-family housing in these changing financial times."
Gleason, whose career in affordable housing spans more than 36 years, has been Executive Director of MassHousing since 2001. He has previously served as Vice President and Secretary/Treasurer of the NCSHA Board of Directors and received an Impact Award from NCSHA in 2008 for his work on an affinity agreement with Fannie Mae, which provides Housing Finance Agencies access to Fannie Mae programs at favorable terms and makes more affordable home loans available to moderate-income homebuyers.
Gleason is a member of Fannie Mae's National Customer Advisory Board and a former member of Fannie Mae's Affordable Housing Advisory Council. He also serves on the Boards of the Massachusetts Housing Investment Corporation, the Community Economic Development Assistance Corporation and as a member of the Mortgage Roundtable of the National Association of Home Builders.
In its 48-year history, MassHousing has provided more than $17 billion for affordable housing, 60% ($10 billion) of which of which has been provided during Gleason's tenure as CEO. MassHousing has helped more than 78,000 low and moderate-income families buy or refinance their home. MassHousing has a multi-family loan portfolio of more than 500 apartment communities valued at more than $3.1 billion.
The Agency also operates its own mortgage insurance fund and services its own single-family loan portfolio which has more than 21,000 loans valued at over $3.8 billion.
"We are excited to have Tom Gleason at the helm of NCSHA at a time that is so important to the future of affordable Housing and the HFA delivery system," said NCSHA Executive Director Barbara Thompson. "Tom has already contributed so much to NCSHA as an outstanding member of its leadership for many years and as an exemplary head of MassHousing. We look forward to the expertise, creativity, and energy that he will surely bring to this new role as President."
Gleason was elected President at NCSHA's recent Annual Conference in Boston along with other officers of the Board of Directors, including Vice President Grant S. Whitaker of the Utah Housing Corporation; Secretary/Treasurer Ralph M. Perrey of the Tennessee Housing Development Agency; and At-Large Executive Committee Member Mary Tingerthal of Minnesota Housing.
October 29, 2014
Former Dalrymple School in Winthrop converted to apartments for seniors
By Tom Farmer
Corporate Communications, MassHousing
WINTHROP – Some of the residents at the new Dalrymple School Apartments found themselves marveling at how their lives had come full circle within the historic school building turned into affordable housing for senior citizens.
Built to educate children in 1920, the school building sat vacant for a number of years until the town of Winthrop turned it into housing. Some of its new residents once roamed its hallways as students.
"Taking this great old school that was once full of children and making it into quality affordable housing for seniors is pretty special," noted MassHousing Executive Director Thomas R. Gleason at a recent event to celebrate the completion of the project. "Some of the residents went to school here as well."
MassHousing provided a $6 million construction bridge loan for the 27-apartment project, which was developed by the East Boston Community Development Corporation with consultation from Affirmative Investments, Inc. of Boston.
"This is a wonderful day for the community," said Town Manager James McKenna. "This marks a moment where we can celebrate working together to make a project like this a reality. It didn't go as planned early on but East Boston CDC came forward and said this is a project we can get done."
All 27 apartments will be affordable for at least 55 years. The three-story, brick school building has been added to the National Register of Historic Places. EBCDC adapted the building to provide needed affordable housing for elderly residents, while maintaining many of the former school's historical features, said EBCDC Executive Director Albert Caldarelli.
The unit mix includes 4 studio apartments and 23 one-bedroom apartments. The renovation also replaced all major building systems, included the installation of an elevator, the re-pointing of exterior masonry and the replacement of precast stone window sills. A school auditorium with historic features was preserved as a common area for resident activities and functions.
The new housing will also provide service options for tenants through EBCDC's partnerships with the Winthrop Senior Center, the Boston Neighborhood Health Center and the Winthrop Council on Aging.
"I am overwhelmed being in this building and I am one of the kids who went to this school," said Nancy Williams, director of the Winthrop Council on Aging. "To see this building vacant saddened me to say the least. I feel like once again lights are going to shine in this building and seniors are going to be together again and enjoy their time here."
The project also received funding from HUD's Section 202 Supportive Housing for the Elderly Program, the town of Winthrop, East Boston Savings Bank, and equity from the sale of Historic and Low-Income Housing Tax Credits.
"This is a prime example of federal, state and local developers working together to build this building," said House Speaker Robert DeLeo, who congratulated all involved in getting the project completed.
"When I saw that the (East Boston) CDC was involved and knowing their reputation and the work they have done over the years in East Boston, I knew this would be a success," said Sen. Anthony Petruccelli. "They have taken vacant, dilapidated buildings and turned them into vibrant communities and that has been done here."
The contractor for the Dalrymple School was CWC Builders, Inc., the architect was Michael A. Interbartolo, Jr., and the management agent is Metro Management.
October 27, 2014
CHOICE Veterans Housing Opens in Westford and Chelmsford
Financing from Affordable Housing Trust and MassHousing's CCRI helped created 13 new units of affordable sober housing for veterans
By Tom Farmer
Corporate Communications, MassHousing
From left, MassHousing Community Services Specialist Ed Chase; DHCD Undersecretary Aaron Gornstein; and MassHousing Community Services Manager Tom Lyons
WESTFORD – Two communities recently showed their commitment to our veterans and the many issues they face after their military service with the opening of two new affordable housing facilities that will provide a sober living environment and supportive services.
CHOICE Veterans Housing will soon see veterans and families moving into the newly constructed housing in Westford and Chelmsford. Developed by Choice Housing Opportunities for Intergenerational and Community Endeavors (CHOICE), an affiliate of the Chelmsford Housing Authority, there are five new family apartments in Westford and 8 new furnished studio apartments in Chelmsford.
Eligible tenants have been selected through a lottery process and will move into the new housing in November.
"This building is something we hold close to our heart," Chelmsford Housing Authority Executive Director David Hedison said at the opening event for the Westford housing on Carlisle Road. "Chelmsford lost someone in the war (Against Terrorism) and we've lost people who returned from the war. We wanted to provide a safe place for our veterans to call home."
CHOICE Veterans Housing in Chelmsford
MassHousing helped finance the new veterans housing with $783,924 from the Affordable Housing Trust Fund and $150,000 from the Center for Community Recovery Innovations (CCRI), a non-profit subsidiary corporation of MassHousing that supports non-profits that create or preserve affordable sober housing in Massachusetts for recovering substance abusers.
Veterans have among the highest rates of homelessness nationally and most homeless veterans only have a choice between sleeping in a shelter or on the street.
"For a veteran to call a shelter home is unconscionable," said MassHousing's Director of Community Services, Tom Lyons, a Vietnam veteran and former executive director of the New England Shelter for Homeless Veterans. "This is exactly the kind of housing—that also provides critical support services—that is badly needed. I can't thank you enough for what you are doing for veterans," Lyons added at the Westford event.
The CHOICE Veterans Housing will provide quality affordable housing to income eligible veterans and their families in the Westford and Chelmsford areas as well as supportive services from the Chelmsford Housing Authority's Family Self-Sufficiency Coordinator. The coordinator will work with tenants to create individual plans to assist them with accessing resources and services such as education, job training, financial literacy and counseling.
CHOICE Veterans Housing in Westford
The Northeast Veterans Outreach Center, which provides assistance to veterans in the Merrimack Valley, will be the point of contact for all the CHOICE Veterans tenants. Services will be rounded out by the Veterans Administration facility in Bedford as well as each community's Veterans Services Officer.
"It is gratifying to see communities recognize the challenges our veterans have and the record homelessness problem they face," said Congresswoman Niki Tsongas, who grew up in a military family. "Those who serve in war have life-changing experiences. This looks like beautiful, beautiful housing and it reflects the respect you have for our veterans who have served."
The new housing also received financing from the state, the towns of Westford and Chelmsford, the Federal Home Loan Bank, CEDAC, Enterprise Bank, Charlesbank Homes and the TD Charitable Foundation.
"These projects don't happen without a lot of local support," noted Aaron Gornstein, the Undersecretary of the state Department of Housing and Community Development. "We have to keep going because there is a tremendous need for housing for our homeless veterans. It takes all of us working together."
State Sen. Eileen Donahue said the supportive services for veterans are as important as creating quality housing.
"The statistics are staggering of the mental illness, Post Traumatic Stress Disorder and substance abuse among our veterans," she said. "Just putting someone in housing with a roof over their head sometimes is not everything they need so the support services part of this is critical. We need to provide to them what they need to be successful with their families going forward."
Veterans housing has been a priority for the Patrick Administration.
"We're going to help stabilize them, we're going to help get them readjusted, back into a community where they live and hopefully this will be the start of some more projects to help us end the scourge that is veterans' homelessness," state Secretary of Veterans' Services Coleman Nee told the Lowell Sun at a subsequent opening event at the Chelmsford facility on Manahan Street.
October 10, 2014
City of Fall River and MassHousing Announce Buy Fall River Now
By Tom Farmer
Corporate Communications, MassHousing
MassHousing and the city of Fall River recently announced Buy Fall River Now, a new loan program for homebuyers and homeowners in the city. From left, Peter Milewski, MassHousing's Director of Homeownership Lending; State Representatives Alan Silvia and Paul Schmid; Mayor William Flanagan; and Earl Gaudette from the Maplewood Neighborhood Association.
FALL RIVER – MassHousing and the city of Fall River have partnered to launch Buy Fall River Now, which will provide affordable home loans to low and moderate-income homebuyers and homeowners who want to renovate their homes.
Flanked by local stakeholders in a vacant home on Lawton Street purchased by the city and being rehabilitated for sale to a first-time homebuyer, Mayor Will Flanagan said the new program is aimed at strengthening the middle class and providing incentives for those who choose to purchase a home in Fall River.
"Buy Fall River Now will allow those who may be looking to purchase a home in our region to give serious consideration to Fall River, recognizing our many attributes and providing financing options that are far more affordable than anywhere else," said the Mayor.
This vacant home on Lawton Street has been purchased by the city and will be renovated and sold to a first-time homebuyer through the Buy Fall River Now program.
The program features homebuyer assistance with acquisition, down payment and closing costs, as well as mortgage payment protection for up to six months if they become unemployed.
Participating lenders—BankFive, BayCoast Bank, Mechanics Cooperative Bank, Bristol County Savings Bank, St. Anne's Credit Union and First Citizens Federal Credit Union—are offering innovative loan products, first time homebuyer incentives, and financing solutions for low- and moderate-income homebuyers. The lenders are also offering MassHousing's Home for the Brave loans which are designed specifically for veterans of the U.S. Armed Services, active-duty service members, and spouses of service members killed while on active duty.
Existing homeowners can also obtain financing through Buy Fall River now to renovate and upgrade their homes.
"We applaud the City of Fall River for their commitment to affordable home ownership," said MassHousing Executive Director Thomas R. Gleason. "By increasing home ownership opportunities for low and moderate income homebuyers and providing financing for homeowners to rehabilitate their homes, we can help to revitalize neighborhoods and strengthen the community. We are glad to be a partner in the Buy Fall River Now initiative."
Michael Dion, Executive Director of the city's Community Development Agency, oversaw the development of the program and worked with the local lenders and MassHousing to implement it.
"Buy Fall River Now will have a direct impact on our neighborhoods and in the process provide economic opportunities for realtors, contractors, local lenders, as well as industry related local companies that work in the field," stated Dion. "Individually, we have all done our best to promote Fall River; through the hard work and efforts of the men and women here today. This program now affords us the opportunity to better market our programs, and provide one stop shopping for anyone looking to purchase or rehabilitate a home in Fall River."
Buy Fall River Now is a partnership between MassHousing, the city, and local lenders,
Realtors and non-profit agencies
Home loans will feature MassHousing's MI Plus mortgage insurance which comes with a job loss benefit at no additional cost to the consumer. If a borrower loses their job MI Plus will cover their monthly mortgage principal and interest payments for up to six months until they become reemployed.
"The City of Fall River has always been fortunate to have local banks that are part of our community, reinvesting in our neighborhoods, and doing great things to improve our quality of life. Buy Fall River Now is another example of this," said Mayor Flanagan. "BankFive, BayCoast Bank, Mechanics Cooperative Bank, Bristol County Savings Bank, St. Anne's Credit Union and First Citizens Federal Credit Union exemplify what it means to be a community partner, and have consistently reinforced their commitment to our community."
For More Information visit BuyFallRiverNow.com or contact the Community Development Agency at (508)-679-0131.
Material provided by the city of Fall River was used in this story.