Of the $100-million figure, $75 million will be set aside for the construction of new mixed-income housing developments where at least 20% of the units will be affordable. Another $22 million is earmarked for mixed-income housing development specifically around transit nodes. The remaining $3 million will go for planning assistance for communities to craft affordable housing plans that conform to the Romney administration's "smart growth" policies.
Both for-profit and non-profit housing developers will be eligible to apply for the funds, which will be made available only to borrowers who receive first-mortgage financing from MassHousing.
The governor's office emphasizes that this program will not use a standardized approach to financing, but rather will be flexible in its application. Due to the high cost of building housing in the state, most developers will probably use the funds to make up for financing shortfalls, but the funds can also be used to write-down interest rates and provide credit enhancements or other loan guarantees. Funds will be awarded as low- or no-interest loans.
MassHousing, the state's affordable housing bank, will administer the new fund. Funding will come from MassHousing's reserves and anticipated mortgage repayments. The fund is geared primarily toward creating new mixed-income apartment complexes although condominium units that are part of a transit-oriented development will be allowed.
Romney notes that preference will be given to development projects that meet smart growth criteria--such as those located in town centers or around train stations as well as those that make use of existing infrastructure--and that provide increased housing affordability. Housing developments that can attract other private and public resources and that provide family units with three or more bedrooms will also receive preference.
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