Posted on July 18, 2012
BOSTON, July 18, 2012 --- The first federally-funded apartment building of its kind to set aside units for people with HIV/AIDs will remain affordable for years to come thanks to an innovating financing collaboration between MHP, MassDevelopment and BNY-Mellon.
These lenders combined to provide $7 million in tax-exempt financing, enabling the Fenway Community Development Corporation to make much-needed repairs to West Fenway Apartments, a seven-story, 48-unit apartment building that has been serving the neighborhood's disabled, elderly and lower-income residents since 1988.
The financing enabled Fenway CDC to pay off its federal loan, cut its interest rate almost in half and make major upgrades to building systems and apartments. Rehabilitation work included replacement of elevator, boiler, water and ventilation systems as well as kitchen, bath and accessibility upgrades, window replacements and installation of sprinklers in all units.
Repairs were completed earlier this summer and a ceremony marking the completion of construction work was held on July 18, with Fenway CDC Executive Director Dharmena Downey introducing several speakers, including Boston Mayor Thomas Menino, City Councilor Michael Ross and State Representative Byron Rushing.
"I want to congratulate the Fenway CDC for having provided housing stability to our citizens for over 20 years - that's an incredible contribution to our community," said Mayor Menino. "Now, the substantial renovation of this property will help preserve this development for many more years to come, offering residents convenient access to the services they need in a place they are proud to call home."
For MHP, the West Fenway loanhelped pushits financing total for loans and commitments in Boston to over $250 million since it started making long-term loans for affordable rental housing back in 1990. This financing - drawn from MHP's bank-funded loan pool - has supported the creation or preservation of over 5,600 units of rental housing in 148 separate housing projects.
"We're proud of our lending history in Boston, and not just because it's over a quarter-billion dollars," said Clark Ziegler, MHP's executive director. "We haven't reached the $250 million mark making just a few big loans. Instead, we've used our private funds in many small and mid-sized projects that fit in with the character of the neighborhood and are the type of neighborhood-scale, bread- and butter-type deals that the mayor supports."
The type of financing used for West Fenway is known as a direct bond placement. In this financing, MassDevelopment issued the $7 million bond and MHP arranged for direct placement of the bonds with BNY Mellon, one of MHP's funding banks. This enabled the Fenway CDC to save money by avoiding the cost of finding investors through a public offering.
Additional financing for West Fenway was provided through federal low-income housing tax credits awarded by the state Department of Housing and Community Development (DHCD). DHCD also contributed $433,000 in federal HOME funds. The City of Boston also provided $508,000 in federal HOME and other funds.
All of the West Fenway rental units are affordable to households earning at or below 60 percent of area median income (AMI). The building consists of 10 studios, 30 one-bedroom apartments, six two-bedroom apartments, and two three-bedroom apartments with the exception of one manager's unit. Five of the units are be set-aside for homeless households earning at or below 30 percent AMI. All units are universally adaptable to elderly occupants and eight units are fully handicap accessible.
For more information on how to use tax-exempt bond financing to preserve affordable housing, contact Senior Loan Officer Amanda Roe at 617-330-9944 x273 or aroe@mhp.net.