Posted on September 30, 2003
The Massachusetts Housing Partnership has put its bank-funded loan pool to work in Cambridge, making a long-term loan of $4.5 million to help preserve 42 units of affordable rental housing located just outside Central Square, one of the city’s most popular areas.
The development, known as CAST apartments, will remain home for its resident population of low and moderate-income families. The three brick buildings have been substantially renovated and will continue to serve the neighborhood’s low-income families as 24 of the 42 units are three-bedroom units or larger.
Thirty-seven of the units will be affordable to families with incomes at or below 60 percent of median income, which in Cambridge is $48,480 for a family of four.
“What’s been done here is all about people caring for the future generations, the children who will need affordable housing,” said Vincent P. McCarthy, chair of the MHP board, at dedication ceremonies on Sept. 30. 2003.
CAST is an example of “expiring use,” a common situation in which affordable apartments financed under a federal program called Section 236, can be sold at market rate after 20 years, if the owner opts to pre-pay out of the program. CAST, purchased with a 236 loan in 1971, was in danger of being lost to the red-hot Cambridge real estate market by 2002.
Enter Homeowners Rehab Inc. (HRI), which purchased the property for $6 million from CAST Associates, a subsidiary of longtime Boston area developer and property management executive Ed Abrams. (Abrams will remain involved in CAST as a co-general partner and manager of the property).
HRI then embarked on a $2.8 million renovation program, making improvements to the kitchens, bathrooms, hallways, grounds and internal systems. The Sept. 30 ceremony marked the completion of the preservation and renovation efforts.
“I’d like to acknowledge Ed Abrams and the Abrams family,” said McCarthy, recognizing the family for agreeing to sell the property to a buyer who would keep it affordable. “They’ve been committed to affordable housing for the past 40 years.”
MHP often refinances these types of “expiring use” properties. For example, earlier this year, MHP put together a permanent financing package of $25 million to preserve 280 apartments in Salem. In 2001, MHP loaned $3.2 million to preserve 60 affordable rental units at the Pondview Apartments in Jamaica Plain.
“When it came time to find a permanent lender, it wasn’t very hard,” said Peter Daly, HRI’s executive director. “MHP knows the affordable housing business as well as anyone else.”
Other funders in the CAST effort include the City of Cambridge, the state Department of Housing and Community Development, Fleet, the Massachusetts Housing Investment Corporation, the Cambridge Neighborhood Reinvestment Corporation, and the Community Economic Development Assistance Corporation.
MHP has now financed five HRI affordable housing efforts, totaling $17 million and 290 rental units.
The MHP funds come from its bank-funded loan pool created in 1990 when the state legislature passed a law requiring banks to extend credit lines to MHP for affordable housing. Since then, MHP’s fund has grown to a half-billion dollars and it has provided hard-to-find, below-market, long-term financing for nearly 10,000 units.
For more information, call 1-877-MHP-FUND.
(PHOTO INFORMATION: Dedication ceremonies for CAST apartments took place on Sept. 30. The purchase, financing, preservation and renovation of the 42 units took just 18 months).