Massachusetts Development to Bring a Mix of Housing Opportunities

Posted on October 19, 2022

The Neighborhood Developers is building the first homeownership project in the state to use ARPA funding.

Under development by The Neighborhood Developers, 25 Sixth Street is the first project to receive MassHousing’s CommonWealth Builder homeownership production funding utilizing American Rescue Plan Act funds.

Under development by The Neighborhood Developers, 25 Sixth Street is the first project to receive MassHousing’s CommonWealth Builder homeownership production funding utilizing American Rescue Plan Act funds.

MassHousing is providing $10.4 million in financing to The Neighborhood Developers (TND) to transform a former light industrial site into 62 new mixed-income rental and homeownership units in Chelsea, Massachusetts.

As part of the 25 Sixth Street development, TND will create six new homeownership units, which will be affordable to moderate-income first-time home buyers under MassHousing’s CommonWealth Builder Program.

The Legislature has committed $115 million in federal funds from the American Rescue Plan Act (ARPA) to scale up the CommonWealth Builder program, and 25 Sixth Street is the first homeownership project in Massachusetts to utilize ARPA funding, according to officials.

“COVID-19 highlighted the importance of having a quality, affordable home, and the 56 new rental units and six homeownership units that 25 Sixth Street will provide just steps from public transportation and downtown Chelsea will add housing stability and economic opportunity to that neighborhood for many years to come,” said Mike Kennealy, state secretary of housing and economic development. “We’re pleased that ARPA funding will support these six new affordable homes for first-time buyers as part of the CommonWealth Builder program as we work to increase homeownership opportunities, especially for communities of color, across the commonwealth.”

TND acquired the parcel, which had an empty warehouse on the site, just ahead of the pandemic. When a pandemic-related food pantry outgrew the office of La Colaborativa, TND made the warehouse available for the food pantry’s use. Thousands of meals were distributed at the site to meet a huge community need.

Rental Apartments

Soon, the property will fulfill another pressing need of more affordable housing. The 56 deed-restricted rental homes along with the six homeownership condominiums will be contained in a single midrise building.

MassHousing is providing TND with a $6.9 million permanent loan, $1.2 million in financing from the agency’s Workforce Housing Initiative, and $932,500 in additional subordinate financing.

The rental financing also involved approximately $13.6 million in tax credit equity from an allocation of federal and state low-income housing tax credits by the Massachusetts Department of Housing and Community Development (DHCD); $4.2 million in direct support from DHCD; $1 million from the Affordable Housing Trust Fund, which MassHousing manages on behalf of DHCD; and $1.2 million in local funding from the North Shore HOME Consortium. Silicon Valley Bank will be the construction lender, and the Massachusetts Housing Investment Corp. will be the tax credit syndicator.

Eight of the new rental apartments will be subsidized with federal housing vouchers and restricted to households earning up to 30% of the area median income (AMI), 36 apartments will be restricted to households earning up to 60% of the AMI, and there will be 12 workforce housing units for households earning up to 90% of the AMI.

There will be 27 one-bedroom, 18 two-bedroom, and 11 three-bedroom apartments. The building will feature a second-story roof deck courtyard.

Homeownership Units

The agency has also committed $1.38 million in CommonWealth Builder funds to support the creation of the homeownership condominiums. Other funding sources in the homeownership transaction include a $3 million construction loan from Silicon Valley Bank, $300,000 from the Affordable Housing Trust Fund, $637,000 in local funding from the North Shore HOME Consortium, and $50,000 from the Charlesbank Foundation.

Three of the homeownership condominiums will be deed-restricted and affordable to households earning up to 80% of the AMI, and three homeownership units will be affordable to households earning up to 100% of the AMI. All six homeownership opportunities will be reserved for first-time home buyers. Condominium units will be priced between $240,800 and $393,200.

“The transformation of 25 Sixth Street in Chelsea is a showcase for the mission-oriented work of The Neighborhood Developers and for our state’s leadership in deploying federal pandemic relief to create stronger and more equitable communities,” said MassHousing executive director Chrystal Kornegay. “This development will create quality new homeownership opportunities and affordable rental housing, in close proximity to transit and jobs, and provide a platform for economic prosperity.”

TND executive director Rafael Mares added: “TND is pleased to work together with MassHousing and the city of Chelsea to bring more for-sale and rental affordable homes to Chelsea. The location of 25 Sixth Street in downtown Chelsea right next to a Silver Line stop makes local and regional amenities readily accessible to our future residents.”

The general contractor will be NEI General Contracting, the architect is Utile Architecture & Planning, and the property will be managed by WinnResidential.

Source: www.housingfinance.com