An innovative loan execution is helping preserve the affordability of a 130-unit seniors housing community in Lynn, Mass.
St. Stephen’s Tower is being acquired and rehabilitated by an affiliate of St. Stephen’s Church and Beacon Communities. Nearly 40 years old, the property is in need of significant renovation.
The 10-story development was originally financed with a federal Sec. 236 mortgage loan and a Rental Assistance Payment contract, which were both set to expire in March 2017. St. Stephen's Tower was selected for MassHousing's Pilot Program for Revitalizing Severely Distressed Properties and was eligible to prepay the Sec. 236 loan.
To help with the acquisition and renovation, the agency has provided $16.4 million in financing.
In financing this transaction, MassHousing in collaboration with Beacon Communities, used an innovative—and first by the agency—execution where the loan was underwritten with a 17-year term and a 35-year amortization period with servicing based on a declining loan balance. As a result of the financing, the property will receive Sec. 8 project-based vouchers through the federal Moving to Work program administered by the Cambridge Housing Authority.
This transaction will extend the affordability at St. Stephen's for the next 30 years.