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Lending notes: Financing takes shape on 6 loans, 2 with interesting history lessons

Posted on October 24, 2021

By Alma Balonon-Rosen

The big news coming out of the summer was the announcement that Cambridge Trust is voluntarily committing $110 million to the Massachusetts Housing Partnership (MHP) to support the creation and preservation of multifamily affordable housing.

This comes as MHP is also expecting to receive more bank funds through its funding statute, which requires that companies that purchase Massachusetts banks make funds available to MHP. The recent flurry of bank acquisitions - Eastern-Century, Rockland Trust-East Boston Savings and Silicon Valley- Boston Private - will add approximately $180 million more to MHP's bank-funded loan pool, which has already used almost $1.2 billion to finance over 26,000 apartments.

While these commitments will enable MHP to continue to offer permanent loans at favorable rates, we don't want it to overshadow the fact that our loan team has been working hard with our partners to close two loans, rate lock three more and move a fourth closer to fruition. These six transactions represent over $46 million for the financing of almost 500 apartments.

Here's a closer look at these six loans, the impact they will have on their communities, and in two cases, how they provided us with a window into the rich history of two proud cities.  

Springfield: Mason Square Apartments

In the process of closing a $650,000 permanent loan to support the second phase of Mason Square Apartments this summer, we also learned more about Springfield's history and African-American entrepreneur Primus Mason.

Developed by First Resource Companies, which has developed and preserved hundreds of apartments in Springfield, Mason Square involved the rehabilitation of the blighted Indian Motorcycle Factory building into 160 affordable apartments. MHP's loan for phase two supported the creation of 60 affordable apartments in this former factory, which initially produced rifles and then became the manufacturer location for one of the most popular brands of motorcycles in the world at the turn of the 20th Century. 

MHP has now provided eight loans and over $10 million in financing to First Resource Companies to support the financing of over 800 affordable apartments in Springfield.

Located in the McKnight Historic District of Springfield, Mason Square is named after Primus Mason, a prominent Black businessman and philanthropist who once owned the land the factory was built on. Born in Monson in 1817, he grew up as an indentured servant and later took jobs as pig farmer, wagon driver and horse undertaker.

Foreseeing Springfield's industrial growth, Primus Mason invested his wages in real estate all over the city, buying land cheaply and selling it to real estate developers for more than he paid for it.  After the Civil War, he sold one parcel to the McKnight brothers, which is the area known as Mason Square.

There are many great stories about Primus Mason, like when he took revenge on a farmer who had beat him as a child by purchasing a property the farmer had his eye on and then selling it to him later for a higher price. We would like to think that Primus helped in a very small way to bridge the racial equity gap at that time. If only there were more opportunities for developers of color today. 

Haverhill: The Hayes Building

Did you know that Haverhill's history as a shoe manufacturing town dates back to 1646, when a cobbler named Andrew Greeley went from farm to farm cobbling shoes together from animal hides so that farmers could wear them in the fields? And that by 1913, 10 percent of the shoes in the U.S. were manufactured in Haverhill?

We were drawn into reading more about Haverhill's rich shoe history recently after MHP closed on a $1.6 million loan on the Hayes Building. The loan was a refinance of one of two loans MHP made to the Planning Office of Urban Affairs (POUA) in 2011 when POUA redeveloped this former downtown shoe box factory across from the train station into three commercial spaces and 57 mixed-income apartments. 

The Hayes Building is significant to Haverhill’s shoe industry because many of the shoes made in the city were packaged in boxes made at this building. While this factory was built in two phases in 1894 and 1911, POUA’s decision to split financing of the Hayes Building into two components was not predicated on history. Instead, it was done to take advantage of the federal financing for the 33 affordable units through the federal Low Income Housing Tax Credit Program and separate financing for the 24 units targeted to moderate-income households.  

Of course, all units, regardless of affordability level, are interspersed in the building.  And being a former factory building, the units have unique layout schematics with wooden columns and brick walls preserved and exposed in many of the apartments.

MHP's refinancing of the 24-unit loan ensures that these apartments will continue to be affordable. And it just so happens the loan was made 375 years after Andrew Greeley was the first to cobble a pair of shoes in Haverhill.

Construction starts & rate locks

Construction starts are a significant milestone in the real estate development process  This summer, MHP locked in the interest rate for three partners with developments under construction, meaning these developers know what their permanent loan rate will be when construction is completed.

In June 2021, MHP locked the rate on a Fannie Mae (FNMA) Mortgage Tax Exempt Bond (MTEB) transaction in the amount of $32.1 million for the rehabilitation of 281 affordable units at Salem Heights. Congratulations to our long-time partner, the Preservation of Affordable Housing, for maintaining affordability for the families and households in development. Here's more on our loan for Salem Heights.

One month later, MHP locked the interest rate in for another development in Salem, a $4.91 million loan commitment to the North Shore Community Development Coalition for The Lighthouses. When complete, this two-building development will feature 46 affordable apartments. The Lighthouses will feature many energy efficiencies and the developer will be pursuing Passive House certification at completion. Passive House is a performance-based program that focuses on dramatic reduction of energy use.

Also in July, the interest rate was set for a $5.2 million loan for Frost Terrace in North Cambridge. Developed by Capstone Communities and Hope Real Estate Enterprises, the development involves the renovations of three homes and the construction of a new building for a total of 40 affordable apartments. Frost Terrace began construction prior to COVID19, but was delayed when the pandemic halted many construction projects around Greater Boston. Despite the added costs caused by the delay, the City of Cambridge and the developers have been committed to seeing this through and we expect construction to be completed in Spring 2022.

Common Ground & return of HUD Risk Share

MHP has moved closer to finalizing terms on a 40-year $2.3 million loan to Common Ground, the development affiliate of Community Teamwork. This loan will preserve the affordability of 29 affordable apartments at Broadway Street Supportive Housing, located in Lowell's Acre Urban Renewal District. MHP is providing this loan through HUD's FFB Risk Share Program, an effective loan program that MHP has used to preserve affordable housing. This program was discontinued three years ago but is in the process of being brought back at the urging of the Biden Administration. 

(Alma Balonon-Rosen is MHP's senior relationship manager for multifamily lending. For more information about MHP's financing programs, email her at or Business Development Manager Nancy McCafferty at