Posted on December 5, 2003
Building by building, block by block, MHP continues to use its bank-funded loan pool to help Worcester turn rundown properties into affordable housing.
The latest example is a formerly vacant brick building at 133 Chandler St., which has been transformed into a ground floor commercial property with five spacious affordable apartments on the second and third floors. Chandler St. is one of the main streets leading away from downtown.
“You don’t have to live in Worcester long to recognize the importance of small properties to neighborhood revitalization,” said MHP loan officer Tom Beard, a resident of Worcester, at dedication ceremonies held Oct. 23. “Small properties are often the worst on the block and their renovation often sets in motion further investment in the neighborhood.”
But this type of small development is costly and hard to finance, which is why MHP created the Small Scale Rental Production Program, Beard said. This program combines MHP first-mortgage financing with a second mortgage at zero percent interest. To rehab 133 Chandler St., MHP is providing a $215,000 first mortgage and a $200,000 second mortgage to Worcester Common Ground, the non-profit that is steadily rebuilding the Piedmont neighborhood of Worcester. Last spring, WCG finished the total rehab of two historic homes on nearby Austin St. into nine affordable apartments. MHP provided an $870,000 first loan and a $760,000 second mortgage to that effort.
MHP is a quasi-public agency that uses funds from the banking industry to provide much-needed long-term financing for affordable rental housing at below-market rates. Bank acquisitions similar to the proposed Bank of America/Fleet transaction trigger the state statute that funds MHP. Since 1990, its loan pool has grown to nearly a half-billion dollars. MHP has used this money to finance over 10,000 units of rental housing.
In Worcester, MHP has used these bank funds to commit over $5 million in long-term financing and another $1 million in second-mortgage subsidy, creating or preserving over 230 units of rental housing, 149 of the units affordable. MHP has focused most of its Worcester efforts on smaller rental efforts ranging from 6 to 54 units.
For more information, contact MHP at 1-877-MHP-FUND.
(PHOTO INFORMATION: This formerly vacant building on Chandler St. has been transformed into a commercial property with five spacious affordable housing units on the second and third floors).