Boston–Long-term affordability for low-income families has been extended at Wood Ridge Homes, in North Andover, Mass. The 230-unit community will also benefit from sizable property enhancements, as a result of $58.5 million in MassHousing financing.
Wood Ridge Homes has been acquired by Barkan Development through a transaction combining the nation’s first use of Low Income Housing Tax Credits (LIHTCs), with a partnership established in 2015 featuring the U.S. Department of the Treasury, the U.S. Department of Housing and Urban Development (HUD) and state Housing Finance Agencies (HFAs), including MassHousing.
In that partnership, the Federal Financing Bank (FFB) purchases a 100 percent participation in the loan that is 100 percent insured by HUD. It also provides lower interest rates on loans to owners of subsidized rental housing, motivating them to refinance, make capital improvements and lock in long-term affordability for lower-income residents. By expanding the 2015 partnership to include use of LIHTCs, this transaction enables the property owner to expand the scope of rehabilitation to Wood Ridge Homes, while also extending affordability of all 230 units for at least 30 years.
MassHousing will provide a $34.5 million taxable permanent loan and a $24 million tax-exempt construction loan.
“This was an acquisition project with a final purchase and sale deadline of the end of 2015,” MassHousing communications director Thomas Farmer told MHN.
“While the project team was working on closing diligence with the borrower, MassHousing, HUD and Treasury were working hard to finalize and implement the program. MassHousing was able to close with the borrower by year end and completed the participation with FFB in early 2016. All this was possible due to the initiative HUD and Treasury took with MassHousing and other HFAs to expand the original FFB program to include the use of Low Income Housing Tax Credits.”
The planned property enhancements include unit upgrades featuring new doors, flooring, carpeting, kitchen cabinets and appliances, energy improvements, common-area enhancements and site upgrades. The seven fully accessible apartments will be increased to a dozen, and accessibility will be improved throughout.
Built 37 years ago, Wood Ridge Homes spreads across a 31-acre site on Woodridge Drive in North Andover. Twenty-three two-story buildings make up the community, which features 92 one-bedroom, 69 two-bedroom, 46 three-bedroom and 23 four-bedroom apartments. All 230 apartments are covered by a federal Section 8 Housing Assistance Payment (HAP) contract.
“MassHousing and other Housing Finance Agencies have continued to work with Treasury and HUD to further enhance this loan program to allow for more construction and rehabilitation of affordable housing,” MassHousing’s Timothy C. Sullivan said. “This transaction is going to allow the property owner to make substantial renovations to in addition to extending the affordability for the residents for the long term.”
Added Peter Barkan, CEO of the Barkan Companies: “This transaction was achieved through a true partnership with MassHousing. The whole team was persistent, creative and focused on securing a financial solution that would support a robust renovation program and the long-term stability to preserve this important affordable housing property.”