MHP provides an additional $2.1M in long-term financing
Posted on April 12, 2010
WAREHAM, April 12, 2010 --- When the economic downturn dampened investor appetite for low-income housing tax credits, 31 affordable housing developments in Massachusetts stalled.
Known as the “Class of 31”, these developments had to scramble to fill funding gaps and many ended up replacing their tax-credit financing with federal stimulus funds. Nearly half of these projects jump-started with stimulus also received financing from MHP.
On Monday, April 12 in Wareham, the first tax-credit project in Massachusetts to be financed with federal stimulus money officially broke ground. Known as 815 Main Street and being developed by JK Scanlan Company of Falmouth, the development will bring 49 units of affordable rental housing to the community and result in nearly 100 construction jobs.
“This is very important housing for people who work in the town,” said Congressman Barney Frank. “This housing is for people who are working, but are not making a lot of money.”
815 Main Street will receive over $8 million in federal stimulus funds through a program called the Tax Credit Exchange Program. The Massachusetts Department of Housing and Community Development (DHCD) has been implementing this program and a similar program called the Tax Credit Assistance Program. DHCD has awarded funds competitively based on projects that were shovel ready for construction and secure in all other aspects of project financing and permitting.
“This project was stopped dead in its tracks because the tax credit market went away,” said Greg Bialecki, secretary of the Executive Office of Housing and Economic Development. “But lawmakers like Barney Frank got the stimulus money to get these projects going and keep the private money in the deal. Now we’ll be able to make the community stronger by making it possible for Wareham residents to remain here and new residents to come here.”
MHP is supporting 815 Main Street with a $2.1 million long-term fixed-rate financing commitment from its bank-funded loan pool. Traditionally a long-term lender for tax-credit projects requiring debt, MHP has continued to play a strong role in getting stalled tax-credit projects going. Of the 31 projects that were stalled, MHP has provided financing for 15 projects, more than twice as many as any other lender for stimulus-funded projects. The MHP financing will help result in almost 700 units of rental housing and hundreds of jobs.
"One of the things we pride ourselves in is our ability to be flexible and to work with borrowers to make their affordable housing rental developments work," said Clark Ziegler, MHP's executive director. "These stalled tax-credit projects were an opportunity for our lending staff to put their experience to work. The financing for these developments had to be redone and we worked with our borrowers to figure out a way to make them happen."
When completed, 815 Main Street will bring 49 new affordable rental apartments to Wareham. There will be 11 one-bedroom units, 35 two-bedroom units and three three-bedroom units and all will be affordable to households up to 60 percent of median income, which in Wareham is $51,480 for a family of four. In addition, five units will be set aside for households at 30 percent of area median income. The project also received funding from the state's Affordable Housing Trust Fund.
ABOUT MHP: MHP is a privately-funded public non-profit organization that uses funds from the banking industry to finance the creation and preservation of affordable rental housing due to 1990 law that requires companies that purchase Massachusetts banks to make loan funds available to MHP. Since then, MHP’s loan pool has grown to over $1.1 billion and it has provided over $643 million for the financing of over 15,000 rental units in the Commonwealth.
For more information on how MHP financing can make your affordable rental housing development work, contact Director of Lending David Rockwell by email or at 617-330-9944 x222.