Financing for mixed-use developments on more flexible terms than is normally available
Posted on May 21, 2014
BOSTON, May 21, 2014 --- In its ongoing effort to promote the revitalization of low-income neighborhoods, the Massachusetts Housing Partnership (MHP) is now offering a New Markets Tax Credit Lending Program, thus providing a new source of capital for the redevelopment of downtown buildings into housing with some commercial or retail space.
Traditionally, New Markets Tax Credits are used for economic and business development. MHP's New Markets Tax Credit Lending Program (NMTC) is designed to work for mixed-use projects that are predominantly housing, with the commercial or retail component comprising no more than 33 percent of the total project.
One of the highlights of MHP's NMTC Program is that it can provide long-term loans out to 20 years with amortization to 30 years, whereas most other NMTC lenders offer terms of 7-8 years for developments that include NMTC investor funds. MHP can also offer attractive interest rates due to its access to low-cost funds from its bank-funded loan pool.
Another highlight is MHP's NMTC Program can provide both construction and permanent financing in a single loan. As a long-term lender that has provided over $970 million for the financing of nealy 20,000 units of rental housing, MHP has experience with all types of developments and understands how to underwrite complicated mixed-use transactions in a cost-effective way.
"Through our many years of underwriting long-term loans for affordable rental housing, we have financed many urban buildings that were mostly housing with some commercial space," said David Rockwell, MHP's Director of Lending. "This new program blends the advantages of attracting new markets tax credit investment with our flexible, low-cost debt financing, something that's not generally available for new markets tax credit developments."
To be eligible, the percentage of commercial space in a development must be between 20 percent (the minimum requirement for new markets tax credits) and 33 percent, which is the maximum allowed under the guidelines of MHP's bank-funded loan pool.
For more information, contact Director of Lending David Rockwell at drockwell@mhp.net or Deputy Director of Lending Dick Mason at dmason@mhp.net.