Posted on August 8, 2003
GLOUCESTER --- Using its ability to provide private sector financing for affordable rental housing, the Massachusetts Housing Partnership (MHP) plans to provide $2.6 million in financing for 39 new units at the historic LePage factory site.
MHP is providing a direct loan of $2.2 million from its highly-successful bank-funded loan pool created in 1990 when the state legislature passed a law requiring banks to extend credit lines to MHP for affordable housing. Since then, MHP’s fund has grown to a half-billion dollars and it has provided hard-to-find, below-market, long-term financing for nearly 10,000 units of rental housing.
In addition, MHP expects to provide another $400,000 from Home Funders, a new program offered by MHP and funded by some of the state’s most generous private foundations in an effort to help the state’s poorest working families.
In Gloucester, Home Funders money is slated to be utilized as a low interest second mortgage, effectively writing down the total long-term interest rate for Cape Ann Housing Opportunities (CAHO), the non-profit that is developing the former LePage glue factory site into affordable housing.
By using this MHP-Home Funders financing combination, CAHO was able to double the amount of rental apartments it could set aside for extremely low-income households, designating eight apartments for families earning at or below 30 percent of median income, or $24,000 per year for a family of four.
This is the second such effort this summer in which MHP has coupled its bank funds with Home Funders money to better reach extremely low-income people. In Roxbury, MHP was able to couple over $6 million of its own bank financing with $750,000 from Home Funders to help fund the creation of 64 units of affordable housing. Home
Funders is enabling developer Urban Edge to increase the number of units dedicated to formerly homeless individuals from six to 15 units.
Home Funders is being created so that affordable housing efforts can serve more low-income families who may be on the verge of homelessness. Some of the state’s most generous philanthropic organizations envisioned and have contributed to this fund, including The Paul and Phyllis Fireman Charitable Foundation, The Highland Street Connection, The Hyams Foundation, The Boston Foundation and Mellon New England.
CAHO is developing the historic LePage glue factory site into approximately 75 to 115 units of housing, most of them affordable. Phase 1 calls for the creation of 39 new rental units, eight one-bedroom, 22 two-bedroom and nine three-bedroom units. The next two phases call for the creation of affordable homeownership units.
William Nelson LePage founded the LePage Glue Factory in 1876. LePage is credited with discovering how to make liquid glue from fish and his company produced glue at the site until 1951, when it moved operations to Toronto. Development plans call for the reuse of six of the existing factory buildings and the construction of three new buildings, according to Nancy Schwoyer, president of CAHO and longtime executive director of Wellspring House, a highly-regarded North Shore non-profit agency.
“If we don’t create affordable housing, Gloucester is going to lose its character,” said Schwoyer.
In addition to MHP, funding is being provided by the Massachusetts Housing Investment Corp. and through low-income housing tax credits awarded by the state Department of Housing and Community Development. Additional funding sources include the North Shore Housing Consortium, the City of Gloucester, the Federal Home Loan Bank and the state’s Affordable Housing Trust Fund, which is administered by MassHousing.
MHP is a quasi-state agency. Using its bank funds, MHP has made over $375 million in loans and pending loan commitments for affordable rental housing.
The redevelopment of the LePage site into affordable housing has also won designation from the Citizen’s Housing and Planning Association as a Smart Growth Demonstration Project. MHP, MassHousing and Fleet Boston Financial Foundation are funding this initiative and LePage is one of five projects that has been selected. Under this initiative, MHP is providing a $5,000 grant to help plan a sidewalk project that would link the housing with nearby rail and bus transit.
For more information, contact MHP at 1-877-MHP-FUND.
(PHOTO INFORMATION: The 39 new units is the first of three phases that calls for the reuse of six historic factory buildings and the construction of three new buildings. The factory's smoke stack will stand at the center of the development, linking the past with the present).