The Visiting Nurse Association in Somerville was awarded $589,861 in grant and advance subsidy and a $750,000 advance in order to turn an abandoned school at 259 Lowell St. into 95 units of rental housing for the elderly. This is the second time that VNA has applied and received assistance from the Federal Home Loan Bank of Boston’s Affordable Housing Program.
The Federal Home Loan Bank of Boston’s Affordable Housing Program has been supplying funds to increase affordable rental and ownership housing throughout New England since 1990. This year the bank awarded nearly $2.9 million to finance 110 housing units in Massachusetts, more than $1.36 million of which was in the form of a grant or advanced subsidy, the bank announced last week.
Since the project’s inception, FHLB Boston’s Affordable Housing Program has approved 661 affordable-housing initiatives and more than $240 million in funds, which has helped to create 19,467 housing units. This year, more than $8.5 million was allocated to local development groups along the East Coast from Maine to Connecticut.
“The affordable housing need in New England has been on the policy level of the six regional states for many, many years. In 1989, Congress decided to change some of the structure of the Federal Home Loan Bank system and [as] part of that change, largely because funds from [the U.S. Department of Housing and Urban Development] were being reduced at the same time, a provision was added which directed Federal Home Loan Banks to reserve 10 percent of net profits for the affordable housing pool,” said FHLB Boston Senior Vice President John Eller.
The AHP does not seek out potential sites for development or sectors of need; instead it encourages regional planning through member institutions that work with area housing organizations in crafting and submitting applications that could potentially lead to initiatives that cater to very low- to moderate-income households on a local level.
The approval process is contingent upon several criteria including income limits, type of housing and location, but each application ultimately is awarded a score based on a point system. Points are awarded for various factors such as sponsorship by a nonprofit or government entity, promotion of empowerment, opportunity for first-time homebuyers, economic diversity and community stability, though that’s not all.
“Even though [the AHP] has complicated scoring rules, it responds to proposals conceived at local levels that actually stabilize communities and provide resources necessary for people so that the community can be stronger in the future,” said Eller.
The program was borne out of a need for affordable housing that extends throughout the country, but has particular emphasis in the Bay State.
“Massachusetts has a desperate need for affordable housing. It’s the only state in the nation that lost population this past year, according to the U.S. Census,” said Eller.
Some studies have indicated the state’s high housing costs may be driving residents t move elsewhere.
This year the commonwealth will see construction enabled by the AHP in five of its cities and towns: Amesbury, Lawrence, Northampton, Worcester and Somerville.
Each project is unique in terms of location, purpose and scope.
Economic Pillar
The Amesbury project, funded through FHLB Boston member Newburyport Five Cents Savings Bank, was sponsored by Simple Living Inc. and will operate under the name Sally’s Place. FHLB Boston provided $366,825 in grants and advanced subsidy and $475,000 in advance to acquire and rehabilitate an 18-unit rental supportive housing facility for very low-income homeless women recovering from substance abuse. One unit will provide transitional housing, with the remaining 17 set to offer longer term residency.
FHLB is providing nearly all of the funds for the $800,000 development, with additional money coming from HOME, a program administered by HUD.
“Different communities respond to different needs. The fact that Amesbury, a higher income community, a lot less dense and urban than some other areas, is supporting affordable housing is notable,” said Theo Noel, FHLB’s senior community investment manager.
In Lawrence, a duplex for two very low-income, first-time buyers has been approved and given a $49,900 grant by FHLB Boston through member Pentucket Five Cents Savings Bank. The project, which supports smart-growth transportation, is being sponsored by Bread and Roses Housing, which will own the land in trust and give buyers a 99-year ground lease to ensure long-term affordability while ultimately achieving a density greater than eight units per acre.
Florence Savings Bank in Northampton is the FHLB Boston member attached to the second phase of a Pioneer Valley Habitat for Humanity project that will create two homes for very low-income, first-time homebuyers. The initiative has been given a $59,945 grant.
“The Lawrence project is being built on land donated by the city of Lawrence. It’s being built to support two people and offer them a lot of services – day care, college resource programs, job training, homeownership counseling and financial literacy training, which will provide them knowledge about predatory lending,” said Ken Willis, assistant vice president of FHLB Boston.
In Worcester, FHLB Boston member Middlesex Savings Bank partnered with the South Middlesex Opportunity Council, which received a $285,389 grant and advance subsidy and a $300,000 advance. The project, a renovation and construction of a former apartment and lodging house that will create 16 units of permanent housing for very low-income, formerly homeless people, is one of SMOC’s many developments in their 12-year participation with AHP.
“SMOC averages two to three developments a year. Our member banks look forward to working with them,” said Eller.
The Visiting Nurse Association in Somerville was awarded the largest sum, $589,861 in grant and advance subsidy and a $750,000 advance, in order to turn an abandoned school at 259 Lowell St. into 95 units of rental housing for the elderly. This will be the second time that VNA has applied for and received assistance from FHLB Boston.
“Five years ago the first-ever VNA-owned and -operated assisted living facility for low-income seniors opened [in March 2000]. We reclaimed a hazardous waste site, the old Hostess Bakery building in Somerville that was a brownfields area. But everyone came together and redeveloped it into a home for 97 seniors,” said Linda S. Cornell, president and chief executive officer for the Visiting Nurse Foundation and the VNA of Eastern Massachusetts.
The FHLB Boston’s contributions, delivered through Wainwright Bank, do not cover the costs of the VNA’s new project, but they have provided a basis from which to start.
“This is a $20 million project. They’re giving us early money, so it’s the money to keep the project moving and keep it moving toward completion,” said Cornell. “The [FHLB] has been an absolute rock-solid supporter of the VNA and its efforts. It’s an organization that puts its money where its mouth is. And from our standpoint, Wainwright Bank has just been the epitome of the community bank – very socially responsible. We were a little community organization with a big dream and they believed in us. They financed the dream and made it happen.”
While each project has its own unique focus and purpose, there is one common thread that ties all the developments together.
“Housing is a fundamental pillar of the economy. Without it people can’t live here, employers won’t have people to run their businesses. Affordable housing has to be affordable for all incomes,” said Noel.
Along with the Massachusetts programs, the FHLB Boston also financed 32 rental units in Guilford, Conn.; 24 rental units in Windham, Maine; 80 rental units in North Smithfield, R.I.; 12 ownership units in Providence, R.I.; 10 rental units in Middlebury, Vt.; 30 rental units in Rutland, Vt.; and 63 rental units in South Burlington, Vt.
