Residents living at the 250-unit Pequot Highlands in the gateway city of Salem will see critical repairs made to the property and an increase in affordability for lower- and moderate-income households as a result of $41.2 million in MassHousing financing.

Silver Street Development Corp. bought Pequot Highlands and with its construction affiliate, Port Harbor Construction Inc., and has started approximately $20 million in renovations to the two high- and mid-rise buildings.

The owner has increased the affordability at the property from 100 to 200 units until at least 2098 through the use of $14.3 million in financing from Low-Income Housing Tax Credits allocated by the state Department of Housing and Community Development (DHCD). Of the 200 affordable units, 125 are supported by a 15-year federal Section 8 Housing Assistance Payment Contract secured by the previous owner in 2014 and administered by the Salem Housing Authority. There are 49 apartments rented at market rates and one occupied by a property manager.

“This is a terrific outcome for the residents of Pequot Highlands,” MassHousing Executive Director Tim Sullivan said in a statement. “This was a fairly complex transaction that was negotiated over a series of months and Silver Street was committed to making sure the important building repairs were addressed and that affordability for the residents was not only increased but preserved for the long term.”

MassHousing provided a 40-year, tax-exempt $41.2 million construction and permanent loan with a 4.14 percent interest rate. The bulk of the financing for $65 million transaction came from the MassHousing loan and tax credit allocation.

Located at 12 First St. in Salem, the buildings consist of 41 one-bedroom apartments, 150 two-bedroom apartments and 59 three-bedroom apartments. Pequot Highlands also has amenities including playgrounds, gazebos, a basketball court, a computer center and views of both the ocean and the Boston skyline.