Preservation of Affordable Housing Inc. (POAH) has purchased the Brandy Hill Apartments, a 132-unit affordable housing complex in Wareham.
The acquisition was made possible by a short-term low-interest loan from Prudential Financial’s Social Investment Program.
The $3 million loan, part of a $10 million line of credit that has helped fund housing in Connecticut, New Hampshire and Massachusetts, provides financing for economically strong affordable housing projects that, due to their regulatory structures, do not fit the collateral standards of typical financing providers. It allows POAH to purchase the property and ensure the long-term affordability and viability of the property.
POAH is purchasing the property, which consists of 11 two-and-half story buildings, to ensure the property will be preserved as affordable housing when its mortgage matures in 2016. POAH anticipates refinancing the property using 4 percent Low Income Housing Tax Credits. The acquisition is financed by the assumption of the current MassHousing mortgage, an acquisition mortgage from MassHousing, and funds from the Prudential line of credit. Improvements will be funded by a "capital reserve" established by the Prudential loan at closing.
"Sound business opportunities do not always fit established molds. This investment is a continuation of Prudential’s social investment mission to provide flexible financing to organizations like POAH," said Preston Pinkett III, vice president, social investments in community resources at Prudential.
"There has been a very significant public investment in creating this housing over the years. POAH’s purchase will preserve the value of those public funds," said Amy Anthony, president of POAH.
The property was originally developed in the early 1970s under the "Section 236 program" which provides interest rate subsidies in exchange for affordability and was preserved under the Emergency Low Income Housing Preservation Act (ELHIPA) in 1994. Its current use restriction expires in 2016.
POAH will be making upgrades to the apartments and plans to complete a more extensive renovation to the apartments upon a financial restructuring within the next five years, according to a statement.
