MassHousing has closed nearly $168 million in financing for the sale of a portfolio of affordable housing developments in what is the largest affordable housing transaction in MassHousing’s 46-year history.

Preservation of Affordable Housing (POAH) of Boston used the MassHousing financing to help purchase five of the affordable apartment communities from their former owner, State Street Development of Boston. MassHousing also approved the transfer of ownership from State Street Development to POAH on a sixth apartment community. All six developments were previously financed by MassHousing, which currently holds the mortgages.

The 841 apartments, 537 of which are located in Boston, had the potential of converting to market rents or condominiums and being lost from the state’s inventory of affordable housing once their existing mortgages expired. As a condition of MassHousing’s financing POAH will maintain affordability at the six developments for at least 40 years. POAH has also extended for 20 years the Section 8 Housing Assistance Payment contracts at the five developments that currently have them. The HAP contracts were otherwise due to expire between November 2014 and May 2019.

"This is the biggest and most complex financing that MassHousing has ever been involved in, but just the type of transaction MassHousing specializes in," said MassHousing Executive Director Thomas R. Gleason. "We applaud State Street Development for being willing to sell these properties to a new owner, POAH, which is committed to preserving these developments for the long term. This is a big win for affordable housing and the people who live in these homes."

The properties purchased and preserved by POAH with the MassHousing loans are:

• Blackstone Apartments in Boston, $44.9 million in loans for 148 units of Section 8 elderly housing.
• Franklin Square House in Boston, $47.3 million in loans for 193 units of Section 8 elderly housing.
• Kenmore Abbey in Boston, $50.6 million in loans for 199 units of Section 8 elderly housing. Kenmore Abbey was financed under a conduit loan program where Boston Private Bank and Trust Co. underwrote the transaction and utilized tax-exempt bond proceeds from MassHousing.
• Machado House at Peter’s Grove in Hudson, $11.6 million in loans for 96 units of Section 8 elderly and family housing.
• Rock Harbor Village in Orleans, $13.3 million in loans for 100 units of Section 8 elderly and family housing.

MassHousing approved the transfer of ownership of King’s Landing in Brewster from State Street Development to POAH but MassHousing financing was not involved in the transaction. King’s Landing is a 108-unit development for families built under HUD’s Section 236 Program.