Residents living at the 501-unit Clarendon Hill Towers Apartments in Somerville, Massachusetts near Cambridge will have affordable rents preserved and see approximately $13 million in property improvements as a result of $50 million in MassHousing financing.
Connolly & Partners, LLC, and the Clarendon Hill Towers Tenant Association refinanced the property through MassHousing’s Multifamily Accelerated Processing (MAP)/Ginnie Mae Joint Venture program with partner lender Rockport Mortgage Corporation.
“Clarendon Hill Towers is an important source of affordable housing for residents in Somerville and this transaction will provide them with significant improvements to the property for their comfort and safety,” said MassHousing CEO Chrystal Kornegay.
“Connolly and Partners, LLC, and the Clarendon Hill Towers Tenant Association would like to thank MassHousing and Rockport Mortgage for their efforts in the successful refinance of Clarendon Hill Towers. This transaction strengthens our partnership and allows us to continue our ongoing commitment to the preservation of affordable, high-quality, safe, and accessible housing in Somerville. Furthermore, this refinance allows us to make significant improvements that will benefit our residents, community, and environment,” said Andrew Comollo, Managing Director of Connolly and Partners.
MassHousing offers the MAP/Ginnie Mae loan program to the owners of rental housing through the U.S. Department of Housing and Urban Development (HUD). HUD provides expedited Federal Housing Administration (FHA) insurance approvals through the MAP program. MassHousing has surpassed $2.5 billion in cumulative MAP lending and the Agency has built the largest MAP lending program of any state housing finance agency in the nation.
The combination of FHA insurance and a Ginnie Mae guarantee enables borrowers to access taxable mortgage financing with lower interest rates, while preserving and extending affordability for hundreds of low-income individuals, senior citizens, and families. MassHousing provided the property owner with a $50 million, 35-year permanent loan.
“We are very pleased to once again work with the owners of Clarendon Hill Towers and MassHousing to refinance this important housing community,” said Dan Lyons, Managing Partner of Rockport Mortgage. “This transaction not only ensures the ongoing affordability of Clarendon Hill Towers, it also provides the necessary funding to complete necessary upgrades and repairs that will improve the lives of the residents calling Clarendon Hill Towers home.”
All 501 apartments at Clarendon Hill Towers are restricted and affordable to households earning up to 60 percent of the Area Median Income (AMI), and 347 of the apartments are more deeply subsidized through a federal Section 8 Housing Assistance Payment Contract. Importantly, residents were able to maintain their current rent levels as HUD agreed to fund the increased revenue needed to support the transaction by increasing the Section 8 subsidy.
Among the improvements slated for the property include bringing all units and common areas to full compliance with accessibility laws, balcony repairs, storm drain repairs, sewer main replacement, roof repairs, replacement of all electrical panels, replacement of windows and balcony doors, new boilers, brick repointing and upgrades to common areas and the garage.
MassHousing has financed 12 rental housing communities in Somerville totaling 2,025 units and $222.1 million in total financing. The Agency has provided home mortgage loans to 887 homebuyers and homeowners in Somerville with an original purchase principal balance of $145 million.
MassHousing has partnered with experienced MAP lender Rockport Mortgage Corporation. Rockport prepares the submission of each transaction for HUD’s approval. MassHousing then closes the new loan and issues a Ginnie Mae Mortgage Backed Security (MBS), which has consistently provided the multifamily mortgage industry its most competitive long term, taxable interest rates.
With each MAP/Ginnie Mae loan, MassHousing continues as the mortgagee of record and becomes a Ginnie Mae servicer. This ensures affordability, as each completed transaction will require the property owner to rent at least 20 percent of the units to those earning less than 80 percent of the area median income. Affordability at many properties could be at risk were MassHousing unable to offer this product, as owners could refinance with other lenders who do not require affordability restrictions.
