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MassHousing has closed on $10.6 million in financing to the East Boston Community Development Corp. for the acquisition, renovation and preservation of 111-unit scattered-site Landfall Community Assoc. properties in East Boston.
The transaction with the East Boston CDC refinances and consolidates two existing affordable housing communities: the 15-unit Landfall Apartments and the 96-unit East Boston Rehab portfolio. In addition to substantially rehabilitating the property and extending the affordability on the 111 units, the financing will resolve the expiring affordability restrictions from the Section 13A mortgage on the 96 East Boston Rehab units.
“This is a great outcome for the residents of these two affordable housing communities,” MassHousing Acting Executive Director Tom Lyons said in a statement. “MassHousing and the East Boston CDC worked closely to ensure that affordability would be preserved and extended, and that the expiring 13A subsidy was resolved in a way that protects residents for the long term. Significant property improvements mean the Landfall Community properties will continue to serve Boston’s working families well into the future.”
Ninety-six units at Landfall were originally financed under the state’s Section 13A housing affordability program, making them a risk to lose affordability. The Section 13A program was created by the Massachusetts Legislature in the 1970s to provide low-interest mortgage financing to affordable housing communities. Today, 13A communities serve some of the lowest-income and most vulnerable populations in Massachusetts, including many elderly residents. The mortgages on these 13A housing communities are nearing maturity and no federal resources are available for their preservation, making them high preservation risks.
In response, MassHousing and the Department of Housing and Community Development (DHCD) have committed a total of $100 million in capital to help preserve affordable 13A units that otherwise would convert to market rates. DHCD is providing $1 million in financing toward the 13A preservation at Landfall.
MassHousing provided a $5.7 million permanent loan, a $4.7 million bridge loan, and a capitalized 13A payment loan of $134,401, and the MassHousing financing generated $5.8 million in equity through federal Low-Income Housing Tax Credits. The transaction also includes a $7.1 million seller note, a $501,188 deferred developer fee and $323,000 in operating income.
“Once again MassHousing has been a great partner in providing us with the ability to provide and preserve affordable housing,” East Boston CDC Executive Director Albert Caldarelli said in a statement. “There has never been a greater need for affordable housing than we are experiencing in East Boston today. With MassHousing as our partner we are confident we will succeed in this venture.”
The 111 units at Landfall are located in five low and mid-rise buildings on scattered sites at 72 Marginal St., 12 Seaver St., 265 and 350 Meridian St. and 186-192 Cottage St. in East Boston. Of the 111 units, 107 are for residents earning at or below 60 percent of the area median income, which is $60,020 for a family of four in East Boston. Four of the units will be rented at market rates.
Among the property improvements planned for the property are renovation of all kitchens and bathrooms, window replacement and refurbishment, flooring, brick and masonry repairs, building system upgrades, replacement of fire alarm systems and some roof replacement.
The general contractor will be Knollmeyer Building Corp., the architect is Davis Square Architects and the management agent is Metro Management, a subsidiary of EBCDC.
