New Atlantic President Peter Roth says that $3.1 million of the $5.3 million to be used for the rehabilitation of 25 Ruggles St. in Roxbury came from the Boston Community Loan Fund. The project is part of Harvard University’s affordable housing initiative.

Just over a year after Harvard University announced the launch of an unprecedented, multifaceted $20 million affordable housing initiative, officials at one of Boston’s community development financial funds are reporting that the program thus far has proved to be a successful one. Furthermore, they are hoping other institutions follow Harvard’s lead in community investment, which would allow even more funding to flow to worthwhile area housing projects.

Using one of its highlighted housing projects – an assisted-living facility in Roxbury – as an example, principals from the Boston Community Loan Fund recently reported that an initial $2 million loan from Harvard University to the BCLF has helped to finance more than $11 million in projects in the past year. Those projects, according to BCLF, are creating or preserving a total of 377 housing units.

“This is just how we expected this to work,” said DeWitt Jones, president of the Boston Community Loan Fund, referring to the partnership with Harvard.

Jones explained the unique setup of the Harvard loan has allowed the loan fund to leverage more capital, expanding the effect of the initial money.

“The unique structure of Harvard’s loan to BCLF – a portion of Harvard’s loan was structured as an equity equivalent, and Harvard was the first university in the country to make that type of community development loan – means that the university’s investment has been leveraged many times over,” Jones said. “Harvard is the first university in the nation to make this commitment to affordable housing and community economic development finance.”

In November of 1999, Harvard unveiled its plan to loan $20 million for the next 20 years to agencies in Boston and Cambridge to help in their efforts to ease the Boston area’s shortage of affordable housing. The program, dubbed Harvard 20/20/2000, allocated $20 million over 20 years beginning in 2000.

The loans, which carry a 2 percent interest rate, were divided among three agencies – the BCLF, Cambridge Affordable Housing Trust and Local Initiatives Support Coalition – with the money being divided equally between Boston and Cambridge.

Jones said Harvard’s affordable housing commitment has been far-reaching because the university did not pigeonhole what the funds could be used for, thus allowing agencies like BCLF to attack the problem.

“It’s really helped us bring in a lot of money, so we can do a lot more,” he said. “The projects range from shelter beds to first-time homebuyer houses. This shows that we’re able to support a whole range of things through this funding.

“Rather than just sticking [the funding] in one single style of housing or on just one project, we’re able to support a range … and that was important.”

Broad Impact
Harvard first allocated $2 million to the BCLF with the provision that the additional $2 million be allocated after the fund demonstrated that it could successfully use the original funds. The second installment of the loan was secured late last month, Jones said, adding that meeting Harvard’s requirements did not prove difficult for his agency.

“It’s a 20-year loan, and we had to meet certain standards by the end of the first year to get the additional installment. I think we were able to meet those standards within the first six months,” he said. “Now we have $4 million, and it’s in for 20 years. That will roll over … and have a broad impact on a large number of projects.”

One of the projects BCLF is highlighting would rehabilitate a long-vacant building near Roxbury’s Dudley Square for use as an assisted-living facility for low-income seniors and those at risk of becoming homeless. The facility, at 25 Ruggles St., is the first low-income assisted living facility in the city of Boston.

The former schoolhouse, last used as a warehouse, will become home to a 43-unit facility. The $5.3 million project is one of 18 projects financed by the BCLF/Harvard partnership. In addition to being the first in the city, 25 Ruggles St. is also one of the first low-income assisted-living facilities in an urban location in the state and one of the first in the country, according to Jones. The project is a joint venture of New Atlantic Development Corp., New Communities Services and the Committee to End Elder Homelessness.

Of the $5.3 million total cost for the project, $3.1 million came from BCLF in the form of a loan, according to Peter Roth, president of New Atlantic. The environment and supportive services of the studio-type housing facility will be on par with facilities charging up to $3,500 per month to more wealthy seniors.

“The Ruggles assisted living project is a wonderful example of how grassroots organizations in our community help the neediest among us and give hope to the entire neighborhood,” Dr. Neil Rudenstine, Harvard University president, said in a press statement. “I am pleased that the Harvard 20/20/2000 loan fund was used to strengthen this extraordinary partnership.”

Construction began at 25 Ruggles St. in November 2000, and the project is expected to be completed by this September.

“The building is set back from the street and had become kind of a drug den,” Jones said.

Other projects benefiting from the partnership include new homeownership houses near Codman Square in Dorchester, the preservation of low-income rental units in North Cambridge and Allston and the renovation of a homeless shelter near Harvard Square in Cambridge.

Jones is beginning to see Harvard’s influence spreading. “They were the first non-bank to take an equity equivalent investment, and we’re encouraging others to see the value in this,” he said. “There’s a loan fund in Chicago that’s talking to a large institution about a similar partnership, so there’s now a broadening of what was once just a bank tool.” Banks are traditionally a good source to turn to for funding, because that type of investment fulfills some Community Reinvestment Act requirements.

“[Harvard Vice President for Community Affairs] Paul Grogan and Neil Rudenstine are people to look to as civic leaders who have put their money to work on something with a strong social return, even though there may not be as much financial return,” Jones said. “It’s an effective way to get money out there, and Harvard has taken the lead.”