MHP News

MHP sets 2 application rounds for new subsidy program

$5M in zero-interest funds targeted at high-opportunity communities

December 23, 2009

BOSTON, Dec. 23, 2009 --- The Massachusetts Housing Partnership (MHP) announced today that it has committed $5 million in zero percent interest, second-mortgage financing to support the development of affordable rental housing in suburban and high-opportunity communities.

The new Neighborhood Rental Initiative Program (NRI) is targeted toward 225 communities characterized by such factors as good schools, proximity to jobs, higher housing costs and a shortage of affordable housing.

1st round applications due in Jan.

MHP expects to review the applications for financing twice a year. The deadline to apply for the first round of funding is Jan. 22, 2010. Applicants are encouraged to seek additional local and state funding sources. Projects requiring tax credits are not eligible for this program.

Applicants may request up to $75,000 per affordable unit, which for this program is defined as units serving households at or below 50 percent of area median income (AMI). The maximum amount of NRI financing per project is $750,000. The minimum project size is five units and 50 percent of the units must have two or more bedrooms.

In combination with MHP financing

NRI second-mortgage financing must be used in combination with at least $250,000 in MHP first mortgage financing. MHP has provided over $640 million in loans and commitments for the financing of over 15,000 units of rental housing in Massachusetts since its bank-funded loan pool was created in 1991.

“MHP understands that in order to produce enough housing to grow our economy and house our neediest citizens, we need a variety of solutions,” said Mark Curtiss, MHP’s managing director. “We have programs that help cities increase housing options and stabilize neighborhoods and we have suburban strategies to help high-cost communities produce affordable housing.

“We know that there are suburban communities that have local funds and public land to build affordable rental housing for families but often need additional financial help to make them viable. This program is designed to help get these community efforts off the ground.”

Experience with this type of affordable housing

The list of eligible communities was determined through a review of a study by the Kirwan Institute at Ohio State University, which analyzed where low income groups and ethnic populations in Massachusetts are living in relationship to geographic areas of high opportunity. The study was commissioned by the Massachusetts Law Reform Institute and funded by the Massachusetts Legal Assistance Corporation.

MHP has had previous success with low-interest, second mortgage subsidy programs like Perm Plus and more recently, the Suburban Rental Development Pilot Production Program, which resulted in developments such as Sandy Pond Road in Groton (9 units), William D. Coakley Residences in Westford (15 units), Baker Street in Foxborough (18 units) and Main Street Apartments, Amherst (11 units).

Program criteria and application process

For details about the program's threshold and comparative criteria, and the application process, download the NRI announcement. For more detailed information about the program, download the NRI term sheet.

Applicants applying for the NRI program are encouraged to first carefully review the NRI term sheet and to speak with a staff member from MHP’s lending team prior to submission of an application. Sponsors may contact their MHP loan officer or MHP’s Megan Mulcahy at 617-330-9944 x269.