Massachusetts Gov. Deval Patrick unveiled a $150 million loan fund aimed at preserving housing developments at risk of losing their affordability.
The roll out of the fund came a few days after Patrick signed the “expiring use” bill that creates a regulatory framework to preserve affordable rents in properties where long-term, publicly subsidized mortgages are paid off and affordability restrictions can then expire. An estimated 90,000 units could be affected, with about 17,000 of those units at risk of losing their affordability through expiring use over the next three years. The legislation establishes notification provisions for tenants within expiring-use properties, a right of first refusal for the state Department of Housing and Community Development (DHCD) or its designee to purchase publicly assisted housing, and modest tenant protections for projects with affordability restrictions that terminate.
The new preservation loan fund is created by the state quasi-public Community Economic Assistance Corp. in partnership with DHCD as they put together a pool of resources to help secure rental projects that are about to lose their expiring-use restrictions. The program is leveraged through state bond funds along with a $3.5 million award to Massachusetts from the John D. and Catherine T. MacArthur Foundation, $40 million from private lenders, and $100 million from the Massachusetts Housing Investment Corp (MHIC). MHIC is a private nonprofit entity founded in 1990 by a consortium of banks and other corporate investors to fill a critical gap in meeting the credit needs of affordable housing developers and owners who are unable to get financing for certain projects from traditional lenders.