By Donna Kimura, Affordable Housing Finance
Six developments with 841 units in Massachusetts have been preserved for decades to come by the Preservation of Affordable Housing (POAH).
The nonprofit acquired the affordable housing portfolio when the prior owner decided to go out of business. The move ensures that the apartments will remain home to low-income seniors and families.
The $243 million deal has been touted as the largest preservation effort supported by the commonwealth of Massachusetts.
More important than the size of the transaction is the irreplaceable nature of the developments. Three properties with 537 units in Boston include historically significant buildings in some of the city's most desirable neighborhoods. The portfolio also includes 208 units on Cape Cod and 96 units in the suburb of Hudson.
The coveted locations put the properties at risk for market-rate conversion.
To position the developments for the future, POAH received 20-year extensions on the Sec. 8 contracts that were nearing expiration and made significant improvements at each site.
POAH also resolved several complicated issues. “This included mitigating the potential risk of a Sec. 8 overhang, where Sec. 8 rents are higher than low-income housing tax credit (LIHTC) rents,” says Rodger Brown Jr., managing director of real estate development.
Each property was financed separately with different partners to spread the large transaction across different sources and improve the ease of execution.
The funding includes a nearly $168 million MassHousing loan and about $70 million in 4 percent LIHTC equity.
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