MassHousing Blog

3 Questions for Mark Teden, VP of Multifamily Programs

Q: What trends do you see based on the lending applications coming in to MassHousing?

A: We see a large increase in the number of mixed income projects as the need for housing and the number of projects under development is far greater than the amounts that can be financed with the volume of tax-exempt debt we can issue.

Q: MassHousing’s rental lending volume has been rising the last several years. Why?

A: The development of the HUD MAP (Multifamily Accelerated Processing) platform has given us access to the benefits Ginnie Mae securitization, which allows us to offer very competitive loan terms to projects that qualify. In addition, because of MassHousing’s longstanding Risk Share relationship with HUD, we were able to take advantage of a very competitive program through the Federal Financing Bank, which is an arm of the U.S. Treasury.

Q: MassHousing oversees properties in its own lending portfolio, but also hundreds of other properties for HUD. What’s something you’d like people to know about the work MassHousing does for HUD?

A: MassHousing receives and resolves over 300 tenant complaints annually for HUD. In addition, the properties we oversee for HUD have access to and the benefit of our Community Services TAP program and all its related activities.

3 Questions with Mounzer Aylouche, VP of HomeOwnership Programs

Q: What’s driving MassHousing’s HomeOwnership Lending?

A: There is no doubt that Down Payment Assistance (DPA) is the main driver for our lending in today’s market. DPA has helped 1,319 families since its inception in 2018; 46% of those families purchased homes in Gateway Cites. In addition to DPA, our low-cost MI Plus mortgage insurance program, which includes unemployment benefits, has proven to be very effective and valuable for borrowers. It is only available through MassHousing.

 

Q: What are the biggest challenges homebuyers face in today’s market? 

A: The shortage of affordable homes on the market has to be the biggest challenge for low- and moderate-income homebuyers. While the drop in interest rates is positive for affordability, the steady increase in home prices limits what and where a consumer can buy. We are seeing more purchase volume in southeast, central and western Massachusetts, indicating that affordability still exists in those markets in relationship to eastern Massachusetts. Another challenge is the amount of student loan debt among borrowers. Potential homeowners with good jobs and good credit are unable to obtain affordable mortgages due to the high level of student debt. We are working hard to find a solution to this problem.

 

Q: What don’t people know about MassHousing’s HomeOwnership Division that they should? 

A: MassHousing’s HomeOwnership Division is unique in what it offers and how it works. Not only do we provide mortgage financing, but we also operate a public mortgage insurance company—the Mortgage Insurance Fund—and we service all of the MassHousing loans made by our lenders right here in Boston. Nowhere else in the mortgage industry will you find a single entity that does each of those functions under one roof.

BHA, MassHousing partner to transform public housing communities

A rendering of Orient Heights

MassHousing and the Boston Housing Authority have teamed up to transform several aging public housing communities in the city, and to revitalize the neighborhoods around them.

"Safe, modern public housing stabilizes families, while providing a platform for economic prosperity," said MassHousing Executive Director Chrystal Kornegay.

A rendering of Camden Apartments

In recent months, MassHousing has closed $78.7 million in financing to the redevelopment efforts of three Boston public housing communities:

• West Newton Apartments, South End - $38.7 million in MassHousing financing will support non-profit developer Inquilinos Boricuas En Accion’s efforts to complete extensive renovations of and extend affordability at this 146-unit property
• Orient Heights, East Boston – MassHousing recently closed a $26 million transaction with Trinity Financial and the East Boston Community Development Corporation for the second phase of the redevelopment of Orient Heights, which will include 88 new public housing units. MassHousing already provided $26.5 million to phase one of the redevelopment effort, which will replace all 331 units.
• Camden Apartments, Roxbury – MassHousing is providing Beacon Communities with $14 million in financing to support the modernization of the 72-unit Camden Apartments.

West Newton Apartments

These are not the first BHA/MassHousing collaborations.  MassHousing provided $60.3 million for the first two phases of the redevelopment of Old Colony in South Boston, and $49.3 million for the Whitter Choice Neighborhoods Initiative currently underway in Roxbury.

"The growing affordability challenges in Boston make these transactions more and more important," said Cynthia Lacasse, MassHousing’s Director of Rental Business Development. "Working with the BHA and our other partners will reimagine these communities, strengthen neighborhoods and ensure that hundreds of Boston households have a safe, affordable place to call home."

These general contractors and property management companies go above and beyond to contract with minority- and women-owned businesses

Construction at Gateway North in Lynn

Midway through the 2019 fiscal year, MassHousing’s multifamily lending has generated millions of dollars in contract awards to minority and women-owned businesses (MBEs and WBEs).

Through its Diversity & Inclusion Division, MassHousing works with developers, general contractors, property owners and managers to set and achieve contracting goals for diverse businesses. Thanks to a shared commitment by MassHousing and its customers, these goals for participation continue to be met and often exceeded.

“It is always great to witness the pride and respect experienced by these businesses as doors are being opened and barriers are removed,” said Andrea Laing, MassHousing’s Director of Diversity & Inclusion.

Construction Contracting:  $22.9 million to MBEs, $10.6 million to WBEs

As of December 31, 2018, eight MassHousing-financed construction projects had been completed. These projects awarded a total of $85.9 million in contracts, $22.9 million (26.7%) of which was awarded to MBEs and $10.6 million (12.3%) to WBEs.

Bilt-Rite Construction, the general contractor for Gateway Residences in Lynn, and Landmark Structures the general contractor for Burbank Gardens in Boston’s Fenway section) were both high achievers.

General Contractor	Project	MBE Goal	MBE Achievement
Bilt-Rite Construction	Gateway Residences	20%	38%
Landmark Structures Corp.	Burbank Gardens	20%	36%

 

In addition, both Gateway Residences and Burbank Gardens also excelled in WBE workforce achievement:

• 2,097 hours were worked by women businesses at Gateway
• 4,944 hours were worked by women businesses at Burbank Gardens.

Keith Construction quadrupled its WBE contract goal at Stratton Hill in Worcester, and NEI General Contracting more than doubled its WBE contract goal at Viviendas Apartments in Boston’s South End.

General Contractor	Project	WBE Goal	WBE Achievement
Keith Construction	Stratton Hill	10%	40%
NEI	Viviendas Apartments	10%	22%

 

NEI was a high achiever in terms of MBE workforce achievement:

• 17,433 (78%) hours were worked by MBEs at Viviendas Apartments
• 15,527 (70%) hours were worked by MBEs at Marble Street in Worcester.

Data from ongoing construction projects will be available at the end of the fiscal year.

 

Management Company Contracting: $20.3 million to MBEs, $14.8 million to WBEs

As of December 31, 2018, 370 MassHousing-financed developments awarded a total of $125 million in contracts, $20.3 million of which (16%) was awarded to MBEs and $14.8 million (12%) to WBEs.

Several management companies far exceeded their MBE and WBE goals. Peabody Properties, which is a WBE itself, was a high achiever for MBE awards at Roxse Homes in Boston’s South End and WBE awards at The Fairways in Lakeville. Related Management was a high achiever for both MBE and WBE contracting at Loring Towers in Salem. UHM Properties, an MBE, and Abrams Management also excelled in terms of MBE contract achievement.

Management Co.	Development	Location	MBE Goal	MBE Achievement
Abrams Management	Lionhead Apts.	Boston, Dorchester	28%	81%
Peabody Properties	Roxse Homes	Boston, South End	28%	74%
Related Management	Loring Towers	Salem	14%	100%
UHM Properties	Washington Heights	Boston, Dorchester	28%	77%

 

Management Co.	Development	Location	WBE Goal	WBE Achievement
Peabody Properties	The Fairways	Lakeville	12%	68%
POAH Communities	Machado House	Hudson	12%	75%
Preservation Management	Cushing Residence	Hanover	12%	68%
Related Management	Loring Towers	Salem	12%	68%

 

Note that these numbers represent six-month totals. Complete data for the 2019 fiscal year will be available in September 2019.

Learn more about MassHousing’s commitment to diversity and inclusion.

Earn too much to qualify for traditional affordable housing but too little to afford market rents? Workforce housing may be the answer.

Sarah Barnat is the developer of Holmes Beverly, a new mixed-income apartment community in Beverly, Mass. that has designated "workforce units" for moderate income renters.

Renters who earn too much to qualify for traditional affordable housing but too little to afford market rents should explore ‘Workforce Housing’ developments opening in Massachusetts.

In 2016, MassHousing committed $100 million to a Workforce Housing Initiative that helps developers build rental housing that is affordable to middle-income residents. That commitment is in addition to the Agency’s efforts to finance new and existing rental housing that serves lower income households.

Since the launch, MassHousing has committed $70.5 million to support 30 developments with 3,082 units, 787 of which are workforce units.

While private property managers handle the day-to-day operations of all MassHousing-financed rental communities, the Agency is helping to spread the word about these new units. A list of developments that have received Workforce Housing is now available on MassHousing’s website, with links to the properties.

The idea came from Sarah Barnat, founder of Barnat Development and developer of Holmes Beverly, a new 67-unit mixed-income property that was built thanks in part to $1.6 million from MassHousing’s Workforce Housing Initiative.

Anyone interested in these units should contact the appropriate property manager for more information.

Renters interested in seeing all affordable apartments financed or overseen by MassHousing can search the Agency’s Housing List. Similarly, contact the property manager for more information.

Homebuyer Success Story: Nieve San Pablo

Meet Nieve San Pablo, who just bought her first home with help from MassHousing.  The 37-year old single mother of three, who works in the New Bedford Public School system, just bought the house in New Bedford through the Buy New Bedford program.

Nieve obtained her mortgage loan from Bristol County Savings Bank. Her loan carries mortgage insurance from MassHousing, allowing her to benefit from MIPlus™.

MIPlus provides unique job loss protection, by paying the principal and interest on a borrower’s loan for up to six months if the borrower becomes unemployed. That’s a benefit that is only available through MassHousing.

The home had been vacant, but non-profit developer Community Action for Better Housing, Inc. rehabilitated the house using funds from Attorney General Maura Healey’s Abandoned Housing Initiative Receivership Fund.  Congratulations to Nieve! 

To meet other MassHousing borrowers who have successfully completed the journey to home ownership, click here.

Partner Profile: MHA, Inc.

 

Avon Place in Springfield received a $44,300 grant from MassHousing's Center for Community Recovery Innovations

 

MHA, Inc. works to ensure that Western Massachusetts residents have the housing and supportive services they need to live and thrive.

The Springfield-based nonprofit operates 25 residential sites and provides extensive outreach and supported living programs that annually serve more than 600 individuals impacted by mental illness, developmental disabilities, substance abuse and homelessness.

"When you look at our growth, there’s a real strategy," said Kimberley Lee, MHA's Vice President of Resource Development and Branding. "From recovery and homeless prevention programs to residential and on-site outpatient services, we’re able to offer a real continuum of care to those we are serving."

MassHousing and MHA have a long history of partnership, which continues today.

 

Preventing homelessness through TPP

The Tenancy Preservation Program (TPP) is a joint effort by MassHousing, housing advocates, state agencies and the Housing Court to prevent homelessness among individuals and families who are facing eviction because of behavior related to mental illness, developmental disability, substance abuse, aging-related impairments or another disability.

MHA has been the TPP provider in Western Massachusetts since the program’s creation in 1998, initially in Springfield and later to the Tri-County area.

TPP acts as a neutral party between landlord and tenant, and provides clinical consultation with the Housing Court. TPP clinicians assess the reasons for the eviction, identify needed services, develop a treatment plan to maintain the tenancy, and monitor the case. If the tenancy cannot be preserved, the program works to find more appropriate housing.

"TPP works to address the underlying social determinants such as mental illness, substance use and poverty, because unless those issues are addressed the tenancy problems will continue," said Jenni Pothier, MHA’s TPP Project Director. "We help people improve their lives, and that helps keep them going forward."

In FY2018, TPP assisted 922 Massachusetts households. Of the 529 cases closed by TPP, homelessness was prevented (where the tenancy was stabilized and sustainable) in 478 cases, a 90% success rate.

MHA and MassHousing are working to expand TPP’s focus to proactively identify problem tenancies and intervene sooner. Ms. Lee noted that the state Legislature's continued funding of TPP shows they "understand the importance and role tenancy plays in the lives of the people we serve."

 

Creating and Preserving Affordable Housing for Those in Recovery

MHA recently received a $44,300 grant through the Center for Community Recovery Innovations (CCRI), a nonprofit subsidiary of MassHousing that supports affordable, sober housing and supportive programs. The CCRI funds will support renovations at Avon Place, an 8-unit property for men and women in recovery.

This is the first CCRI grant MHA has received, and helped leverage other funds to replace the roof, upgrade windows and improve the accessibility ramp at Avon Place.

"The CCRI grant was instrumental to allowing us to make these improvements, and to make this a place we would want to live and our residents want to live," said Christine Palmieri, MHA's Vice President of Recovery and Housing.

Ms. Pothier noted that Springfield is a hotspot for the opioid epidemic and estimates that more than a third of the individuals served by MHA are struggling with addiction. Affordable, sober housing is a much-needed resource for the community.

"As an agency that shares a similar mission with MassHousing—confronting the housing challenges to  improve the lives of its people—MHA is a natural and authentic partner we value at CCRI, Community Services and MassHousing alike," said MassHousing’s Ed Chase.

MassHousing’s partnership with MHA continues to grow and evolve to meet the needs of Western Massachusetts residents.

“It’s not just a funding relationship,” Ms. Pothier said. “It’s been an involved, integral partnership. We’re grateful for all of the involvement we have with MassHousing.”

Development Spotlight: Chestnut Park Apartments, Springfield

$50 million in MassHousing financing will help the Related Companies preserve affordability, create workforce units and complete a variety of renovations and modernizations at the 489-unit Chestnut Park Apartments in Springfield.

Built in the 1970s, Chestnut Park Apartments consists of a 33-story tower with a connected four-level parking garage, an 18-story building, a nine-story building and a five-story building with a connected two-level parking garage. The development includes 207 one-bedroom apartments, 264 two-bedroom apartments, and 18 three-bedroom apartments, as well as 19,000 square feet of commercial space.

The financing includes $45 million in tax-exempt financing through the Agency’s Conduit Loan Program and $5 million from MassHousing’s Workforce Housing Initiative. The project will also benefit from an additional $2 million from the Affordable Housing Trust Fund, which MassHousing manages on behalf of the Massachusetts Department of Housing and Community Development.

"Related Companies is reinvigorating the Chestnut Park Apartments, bringing substantial capital improvements, greater income diversity, and strong property management practices," said MassHousing Executive Director Chrystal Kornegay. "MassHousing is proud to partner with Related and the City of Springfield on this important project. It will strengthen Springfield’s downtown, and the families who call this apartment community home."

Through the transaction, 412 units will remain affordable to households earning no more than 60% of the area median income. The remaining 77 units will be workforce housing units affordable to households earning no more than 85% of AMI.

Among the renovations planned for Chestnut Park are unit, streetscape, building envelope and systems upgrades, including the replacement of HVAC systems, windows and elevators. Related Companies also plans to make improvements to communal spaces and building amenities. The modernization project will bring 25 units up to ADA standards for mobility impaired households and 10 units for hearing-impaired households. 

Q2 Lending Update

Arborpoint at Woodland Station was among the 20 developments to have received MassHousing financing in FY'19

Halfway through fiscal year 2019, MassHousing is on pace to have one of its strongest lending years ever.

MassHousing’s 2019 fiscal year runs from July 1, 2018 to June 30, 2019. As of December 31, the Agency has closed $1.07 billion in financing to help ensure that 6,249 Massachusetts residents have an affordable place to call home.

On the Rental Housing side, MassHousing has closed $531.4 million in financing to support the creation or preservation of 20 developments with 3,200 units of rental housing. A number of multifamily transactions are in the pipeline and expected to close before the end of FY’19, June 30.

On the HomeOwnership side, MassHousing has closed 2,909 home mortgage loans for $509.6 million. HomeOwnership lending continues to be driven by interest in MassHousing’s Down Payment Assistance program, which has benefited 871 homebuyers in FY19. Another 140 loans for $29.7 million were made possible through MassHousing’s Mortgage Insurance Fund.

Common Pre-Application Streamlines Applicant Placement on a Wait List

A five-year effort by MassHousing and industry partners recently came to fruition, when the Agency released the Common Pre-Application for Affordable Rental Housing.  

The Common Pre-App helps management companies facilitate and improve efficiency throughout the application and wait list placement process. It also helps anyone looking for an affordable apartment since they can complete the document once, and then submit it to multiple properties. In the past, different developments and management companies required their own forms be completed.

"What we saw out there was an affordable rental housing application crisis," said Henry Mukasa, MassHousing's Director of Rental Management. "Having a self-certifying, short Pre-Application form makes the application and wait list placement process easier for prospective applicants. A big thank you to the team that worked diligently to create the fantastic Pre-Application form."

MassHousing staff worked closely with Peabody Properties' Melissa Fish-Crane and Doreen Donovan; Debbie Piltch of Piltch Associates; and Beacon Communities' Deb Burke to develop the Common Pre-App. The document has been translated into nine languages and is accepted by most of MassHousing's management company partners.

View the Common Pre-Application here!