Commits $15 million for 192 mixed-income units
Posted on May 18, 2005
BOSTON --- Using its ability to provide low-cost financing for affordable rental housing, the Massachusetts Housing Partnership (MHP) is providing a $15 million long-term loan for Windsor Green Apartments, a 192-unit mixed-income rental development in Andover.
Windsor Green will be built on 11 acres at the intersection of I-93 and Lowell Street, the site of the former Rolling Green Hotel. When completed, it will consist of one existing three-bedroom home and 191 units to be built in three detached three-story wood-frame buildings.
MHP is making the loan to Boston and Dallas-based Criterion Property Company, LP. Bank of America is providing a $27 million construction loan and has also committed up to $12 million in permanent financing.
This is the second loan MHP has made recently for affordable rental housing in Andover. Last year, MHP made a $1.9 million long-term permanent loan commitment to preserve 28 units of affordable rental housing at Brookside Apartments, the remainder of which are being converted into condominiums.
“With condominiums increasingly becoming one of the only ways in which families can achieve homeownership, we have to make sure we are maintaining our supply of rental housing,” said Clark Ziegler, MHP’s executive director. “These two loans in Andover reflect our efforts to support new high-quality rental developments where communities want it, and to preserve affordable rental housing when it makes sense.”
Windsor Green is being built through the Massachusetts Comprehensive Permit Law, which requires communities to have 10 percent of its housing affordable to lower-income residents. More commonly known as Chapter 40B, the law enables local Zoning Boards of Appeals to approve housing developments under more flexible rules, providing 20 to 25 percent of the new units are affordable.
When complete, 144 units at Windsor Green will be rented at market rate. Forty-three (43) units will be offered to households earning no more than 80 percent of median income, which in Andover is $52,000 for a household of three. Five (5) units will be offered to households making no more than 50 percent of median income.
The 48 units will be affordable in perpetuity, with a 50-year restriction before they can be converted to affordable condominiums. With this project, 11.6 percent of Andover’s housing is now considered affordable.
In addition to its loan commitment, MHP also provided Criterion with a Site Eligibility Letter, the first step developers must take when seeking to build through a comprehensive permit.
The $15 million loan commitment to Criterion follows a $1.9 million loan commitment MHP made in September, 2004 to preserve 28 units of affordable rental housing at Brookside Apartments, a 17-year-old 168-unit Chapter 40B rental development that is being converted into condominiums by a subsidiary of the Boston-based Winn Companies.
With the town concerned about the impact on the supply of affordable housing, the owner agreed to preserve all 42 affordable units, selling 14 as affordable condominiums, and keeping 28 as rentals. Eighteen of the rental units are one-bedrooms and 10 units are three-bedrooms.
Andover was given a leadership award by the Citizens’ Housing and Planning Association (CHAPA) in 2004 for its affordable housing efforts. CHAPA noted that Andover has used Chapter 40B to approve 459 housing units in the last five years, in addition to its efforts to preserve the 42 affordable units at Brookside Apartments. The median income in Andover is $98,000 and the median price of a home is nearly $500,000.
“While many communities complain that they are helpless when it comes to 40B, these two affordable housing efforts illustrate why Andover has been effective in addressing its affordable housing needs,” said MHP’s Ziegler.
About MHP: MHP is a quasi-public state agency that finances affordable rental housing with private bank funds, an outcome of a 1990 state law that requires banks that purchase other banks to make funds available to MHP. Bank transactions such as Bank of America’s purchase of Fleet Boston trigger the state statute that funds MHP. That acquisition resulted in a $406 million loan and an $18 million grant to MHP, pushing MHP’s total loan pool to over $1 billion. MHP is one of the state’s leading producers of affordable rental housing. Since 1990, MHP has provided over $370 million in permanent loans for the financing of 11,000 units of rental housing. In addition to financing, MHP also helps cities and towns initiate and develop affordable housing. It also provides homeownership opportunities through the SoftSecond Loan Program, a mortgage program for low and moderate-income first-time homebuyers.