The Healey-Driscoll Administration and MassHousing announced today the second financing commitment under the Momentum Fund, a first-in-the-nation state revolving fund to support mixed-income housing production. Today's financing commitment will advance the development of Post Allston, creating a total of 170 new mixed-income rental homes, including 34 new affordable rental homes and retail amenities.
The Momentum Fund was created by the Healey-Driscoll Administration under the Affordable Homes Act, the largest and most ambitious housing bond bill in Massachusetts history. This is a new tool in the state's housing toolkit to accelerate the production of housing – especially middle-income units – without relying on typical grant and subsidy resources. With this fund, the concept is to leverage low-cost capital with the expertise of private developers and incentivize already permitted and much needed housing projects to commence construction. By leveraging this new financing tool, more homes can be built sooner, and help provide much needed units for families, seniors, and young adults. MassHousing aims to support the creation of more than 1,000 new units of multifamily housing with $50 million of state investment capital and is evaluating how to further expand this goal with co-investment partnerships.
"This new initiative created by our Affordable Homes Act is helping us increase the production of reasonably priced housing across the state," said Governor Maura Healey. "And as a first-in-the-nation state revolving fund, it will continue to work to drive housing production for years to come."
"We're excited to see the impact the Momentum Fund is already having," said Lieutenant Governor Kim Driscoll. "We need housing at all income levels and, with this second financing commitment, we’re moving the needle on building more homes that people can afford."
"By creating co-investment partnerships with the state and MassHousing, we are able to accelerate production of that crucial middle- and mixed-income housing that our communities need," said Secretary of Housing and Livable Communities Ed Augustus. "Many times, these are developments that are ready to proceed but have stalled due to changing economic factors. The Momentum Fund will help move them forward and deliver on the Healey-Driscoll Administration's commitment to growing housing that is affordable to more Massachusetts residents."
"The Post Allston project represents the power of the City and state working together to create more homes," said Boston Mayor Michelle Wu. "Together, we are forging a creative path to getting more mixed-income housing into construction. I'm grateful to our state leaders for their collaboration and partnership moving projects forward and look forward to supporting more opportunities for families to call Boston home."
"Our state's housing crisis demands bold action, and the Healey-Driscoll Administration's Affordable Homes Act is allowing Massachusetts to pioneer new housing production solutions," said Chrystal Kornegay, CEO of MassHousing. "We thank all of our partners for helping to make this exciting housing development possible."
Massachusetts is a national leader in financing the production and preservation of affordable housing. The state's housing needs reach beyond traditional affordable housing. The Healey-Driscoll Administration's new statewide housing plan found that Massachusetts must create 222,000 new homes by the year 2035, in order to support a growing economy and meet housing needs of residents of all ages and incomes. The need for new housing production exists across Massachusetts, at all income levels.
Prior to the Healey-Driscoll Administration's Affordable Homes Act, Massachusetts lacked an effective tool for supporting the production of new market-oriented, mixed-income homes. The $50 million Momentum Fund, proposed by Governor Healey and enacted as part of the Affordable Homes Act, allows public financing to partner with private capital, in order to build more homes, more quickly, in more Massachusetts communities.
The Momentum Fund offers developers of mixed-income housing an efficient and predictable source of stable equity financing. Momentum Equity is not a subsidy or a grant, but it is designed to be flexible compared with other equity available in the commercial market. Momentum Equity financing is designed to blend with privately financed equity and revolve over time, creating a permanent source for mixed-income housing growth.
These new equity and mortgage financing solutions will lower the financing costs faced by housing developers and mobilize private investment in housing production, allowing new housing to proceed to construction in a higher-cost environment, and ultimately helping to deliver more housing to Massachusetts residents.
Momentum Fund financing will support the development of Post Allston, a new 170-unit mixed-income rental project in Boston’s Allston neighborhood. Post Allston involves the demolition of vacant and underutilized single-story commercial structures, and the construction of a new six-story apartment building with ground-floor retail. The sponsor is Eden Properties. MassHousing has committed $10 million in public equity financing to the project, and MassHousing will partner with Berkadia to provide taxable permanent financing from Freddie Mac.
MassHousing previously committed Momentum Fund equity financing to the Residences at East Milton in Milton, a 92-unit mixed-income rental development by the Joseph J. Corcoran Company. To date, Momentum Fund equity and associated mortgage financing has supported the development of 262 mixed-income rental homes, including 54 new affordable homes. Additional financing commitments will follow in the coming months.
About MassHousing
MassHousing (The Massachusetts Housing Finance Agency) is an independent, quasi-public agency created in 1966 to confront the Commonwealth’s housing challenges. The Agency raises capital by selling bonds and lends the proceeds to low- and moderate-income homebuyers and homeowners, and to developers who build or preserve mixed-income rental housing. MassHousing does not use taxpayer dollars to sustain its operations. As a mission-driven agency, MassHousing uses housing finance to strengthen communities and lay the foundation for economic prosperity. Since its inception, MassHousing has provided more than $29 billion in housing finance. For more information, visit the MassHousing website at www.masshousing.com.
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