SALEM – Pledging to increase the supply of housing across the Commonwealth, Governor Mitt Romney today awarded nearly $75 million worth of grants, loans and low-income housing tax credits to create and preserve 1,631 rental homes in 21 communities across the Commonwealth.
“This significant commitment of state and federal resources, along with millions of private investment dollars generated through the sale of tax credits, will increase the availability of housing for thousands of Massachusetts families,” said Romney. “Through this blend of resources, we can help ease our housing supply shortage while ensuring long-term, economic prosperity for our state.”
Approximately $51 million of the funds announced will be generated through private investment in exchange for 10 years of state administered federal Low Income Housing Tax Credits (LIHTC). Another $23.65 million will be administered from the state Department of Housing and Community Development’s (DHCD) Housing Stabilization Fund (HSF), Capital Improvement and Preservation Fund (CIPF), Facilities Consolidation Fund (FCF), HOME program and the Housing Innovations Fund (HIF).
Each of the programs is designed to serve developers who produce housing for income eligible seniors, families, individuals and special needs residents across the state.
Romney, who was accompanied at the announcement by Mayor Stanley Usovicz, made the announcement in front of the Salem Heights Apartments, where $1.75 million will be used to help preserve the long-term affordability of 227 apartments at that development.
The Salem Heights award is from the state’s Capital Improvement and Preservation Fund (CIPF), a bond funded program used to preserve housing in developments that were originally financed by the federal government in the 1970s.
As those 25 and 30-year mortgages expire, owners have the option of converting the affordable rate units into market rates.
The CIPF grant will allow Preservation of Affordable Housing, Inc. (POAH), a national non-profit organization, to purchase Salem Heights, retaining its affordability for the next century and complete renovations at the two high-rise buildings that house a total of 283 apartments.
“Over the past two years, the City of Salem has gone to court to prevent these units from going to market rate. With this state funding, 227 families will be allowed to remain in their homes. Along with the hundreds of units we have created in downtown Salem, we have gone a long way to solving the housing crunch in this city,” said Mayor Usovicz.
The quasi-public agency, Massachusetts Housing Partnership is also providing $7.2 million in direct financing for Salem Heights and another $18 million generated through the sale of tax-exempt bonds issued by MassDevelopment. These bonds are backed by letters of credit from Fleet’s Community Investment Group, Banknorth and the Federal Home Loan Bank, resulting in the new owner being able to obtain the lowest possible long-term interest rate.
In addition, Romney said, the Salem Harbor Community Development Corporation was awarded $750,000 from the Housing Stabilization Fund (HSF) and $373,249 in federal LIHTCs, which will generate nearly $2.8 million in investor equity over 10 years, for the development of Salem Point Rentals – 61 apartments, of which 56 will be affordable to low- and moderate-income households.
“Given the current state of the economy, retaining the affordability of developments like Salem Heights is more critical than ever for the Commonwealth,” said DHCD Director Jane Wallis Gumble. “These various resources allow us to continue serving the core housing needs of low- and moderate-income families.”