MassHousing launching $50M developers fund to address inequities in capital access
Photo | Matt Wright
The Worcester multi-family development Alta on the Row under construction
MassHousing, the quasi-public agency created to support affordable housing opportunities for state residents, is teaming up with a nonprofit to launch a $50-million fund designed to help address disparities to capital access in the real estate industry.
The new Equitable Developers Fund is the largest publicly led financing program of its kind in the country, according to a press release issued by MassHousing on May 14. MassHousing is launching the fund in collaboration with the Massachusetts Housing Investment Corp., a private nonprofit based in Boston offering financing to affordable housing and community developments throughout New England.
The fund will offer developers access to working lines of credit and standby letters of credit to underrepresented developers in an attempt to break down traditional barriers of entry into the industry. In addition to funding, the program will offer technical assistance to developers in order to help them understand potential affordable housing development opportunities and additional sources of financing.
The initiative is seeking to support emerging developer enterprises made up of residents who currently or have previously resided for five or more consecutive years in one of the state’s 26 Gateway Cities, which includes Leominster, Fitchburg, and Worcester. Residents of other select municipalities, including Framingham, are also eligible, as are residents in the U.S. Department of Housing and Urban Development qualified census tracts.
Residents who do not meet these requirements are still eligible, providing they provide documentation addressing their social disadvantages and meet other eligibility requirements.
"With an overwhelming shortfall of affordable homes in the commonwealth, we need more developers putting shovels in the ground," Moddie Turay, MHIC’s president and CEO, said in the May 14 press release announcing the fund. "We also need to help ensure that socially and economically disadvantaged developers can participate in solving our region's affordable housing crisis. The Equitable Developers Fund directly and impactfully addresses this challenge."
MICH and MassHousing are seeking to raise an additional $25 million from private investors to help expand the reach of the fund.
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