MassHousing has closed on $1.6 million in financing to the nonprofit Affordable Housing and Services Collaborative Inc. and Peabody Properties Inc. to support the construction of a new 62-unit, mixed-income development in downtown Haverhill.

98 Essex St. will involve the redevelopment of the vacant, historic Shoe and Leather Association Building into 62 new units of housing for low- and moderate-income households. The project will create seven units for formerly homeless families and six workforce housing units.

“The transformation of the former Shoe and Leather Association Building will advance the revitalization of an important Gateway City downtown, while providing new housing options to working households,” MassHousing Executive Director Chrystal Kornegay said in a statement. “AHSC and Peabody Properties have the expertise and vision to turn this vacant, former mill property into attractive, affordable housing that will serve the region’s families for years to come.”

Seven of the project’s 62 units will be supported by a federal Section 8 Housing Assistance Payment subsidy for very low-income households earning at or below 30 percent of the area median income (AMI). New Lease for Homeless Families will assist families with access to these units and to supportive services. Two units will be affordable for households earning 50 percent of AMI, 47 units will be affordable for households earning up to 60 percent of AMI, and six will be workforce housing units for households earning up to 80 percent of AMI. The median income for a family of four in Haverhill is $87,600.

There will be 15 one-bedroom apartments, 41 two-bedroom apartments and six three-bedroom apartments. The historic building will also have commercial space.