MassHousing’s Loans Benefit Lynn, Mass., Seniors Housing
- Dec 31, 2014
Boston—MassHousing loans totaling $16.4 million will make large-scale property renovations and the extension of affordability possible at St. Stephen’s Tower, a 130-unit community for seniors in Lynn, Mass. The loans are intended for acquisition, renovation and preservation of affordability at St. Stephen’s Tower.
Located at 25 Pleasant St. in Lynn, the community is almost 40 years old. It is in need of substantial repairs and renovation of common areas and apartments. In addition, the community requires repair and replacement of building systems, and increases in energy and water efficiency. It is being acquired and renovated by an affiliate of St. Stephen’s Church and Beacon Communities LLC.
The 10-story structure features 10 studio apartments, 110 one-bedroom apartments and 10 two-bedroom apartment homes.
Keith Construction, Inc. is the contractor, Bechtel Frank Erickson Architects, Inc. the architect, and Beacon Residential Management the management agent.
To complete the transaction, it was necessary to find a means of accommodating the request of the borrower, Beacon Communities, for a ‘GSE-like’ execution.
“This was a timely challenge given the agency was in discussions with Fannie Mae to find more innovative ways to finance rental properties,” Monte Stanford, MassHousing’s director of rental lending, tells MHN. “Our underwriting, legal and finance staff worked hard to create a potential template for closing this first-ever balloon transaction. Senior citizens at the project will benefit from the extended affordability, and from the variety of upgrades and capital improvements that will be completed at the property over the next year.’’
In financing this transaction, MassHousing in collaboration with Beacon Communities used an execution in which the loan was underwritten with a 17-year term and a 35-year amortization period, with servicing based on a declining loan balance. As a result of this innovative MassHousing financing, the property will receive Section 8 Project Based vouchers through the HUD Moving to Work program, administered by the Cambridge Housing Authority.
This transaction will extend the affordability at St. Stephen’s for the next 30 years. “Being able to complete varied and innovative types of financing allows us to help renovate and extend the affordability at important housing communities like St. Stephen’s,” MassHousing executive director Thomas R. Gleason says.
“We were pleased to work collaboratively with Beacon Communities to make sure this important affordable community remained available to seniors in Lynn for decades to follow.’’
Adds Beacon Communities CEO Pamela Goodman: “Beacon Communities and our partner, St. Stephen’s Episcopal Church, are pleased that we were able to work with MassHousing, HUD and the Cambridge Housing Authority to develop a financing plan that enabled us to preserve this much-needed affordable housing community in the City of Lynn.”