Pheasant Hill Village, Agawam
Partners: SHP Acquisitions, U.S. Treasury, U.S. Department of Housing and Urban Development
During the development of MassHousing’s strategic plan, we heard from multifamily owners that they wanted an execution with a better rate. MassHousing responded with a loan product made possible by a new program from the U.S. Treasury's Federal Financing Bank.
Pheasant Hill Village, a 200-unit Section 8 apartment community in Agawam, became the first property in Massachusetts and only the second in the country (the first was in New York City) to benefit from the program. The original loan, which was made in the 1970s and ensured the units would be affordable to low-income renters, was set to mature in the next several years. Upon mortgage maturity the owner would have been free to explore the possibility of converting the apartments to market rents.
Using the new program, with help from HUD and the U.S. Treasury, we closed a $17.6 million transaction with Pheasant Hill Village Associates, an affiliate of SHP Acquisitions. Part of the loan funded capital improvements such as replacement of boilers; updated plumbing; energy efficient lighting fixtures; accessibility improvements; and site and exterior repairs. Affordable rents will be maintained for at least 20 years as a condition of the loan. The interest rate of just 3.9% was dramatically lower than the rate on a traditional execution, which would have been in the low 5% range.
"This transaction was very important to SHP and all the families at Pheasant Hill Village," said Dan Smith of SHP Acquisitions. "Working successfully with MassHousing to complete this refinance, we have been able to provide funds to keep this asset in great condition for the next 20 years. Additionally, we are able to commit to keeping these rents affordable for 20 more years. Both MassHousing and HUD have worked tirelessly to provide this special finance program. A true win-win for everyone involved."