Posted on June 16, 2006
Using its ability to provide long-term financing to affordable housing developers at below-market interest rates, the Massachusetts Housing Partnership (MHP) is committing $16 million to a local non-profit organization for the refinancing and renovation of North Canal Apartments.
The loan will enable the Coalition for a Better Acre (CBA) to keep 265 units affordable and make much-needed renovations to the 38-year-old rental apartment community, which is spread out over 27 buildings in the Acre neighborhood of the city.
“For more than 20 years, Coalition for a Better Acre has strived to maintain and increase the supply of affordable housing in Lowell,” said Wendy Hanna Cohen, MHP’s deputy director of lending. “There is no better example than their long involvement with North Canal and their continued efforts will ensure that residents and newcomers to the city will always have an affordable place to live.”
Direct bond purchase
North Canal was built in 1968 by a private developer. Following some financial difficulties, it was sold in 1989 to a limited partnership group controlled by CBA and the North Canal Tenants Council. MHP is now teaming with MassDevelopment and TD BankNorth to provide new financing, utilizing MassDevelopment’s ability to raise money through the issuance of tax-exempt bonds. In this transaction, TD BankNorth is purchasing the bonds directly from MassDevelopment. MHP is then borrowing the proceeds from MassDevelopment and lending the funds to CBA at below-market interest rates.
This is the third loan MHP has made to CBA for affordable housing in the Acre neighborhood. In 1998, it provided a $238,000 loan to turn four abandoned properties into 26 new units of affordable rental housing. In 2004, it made a $1 million loan to helpcreate 33 new affordable rental units in and around Liberty Square. Overall in Lowell, MHP has now provided over $21 million in loans and commitments for the financing of 533 rental units, 499 of them affordable.
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. Since 1990, MHP has provided over $430 million in permanent loans for the financing of 12,000 units of rental housing. In addition to financing, MHP 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.
For more information, call 617-330-9944 x227.