Photo by James Sanna | Banker & Tradesman Staff

One of the state’s two major affordable housing and homeownership finance organizations has landed a major contribution that it says will help support a range of housing priorities.

Cambridge Trust Co. has committed $110 million to the Massachusetts Housing Partnership for terms of up to 20 years, MHP said in a statement. The organization said it will use the money to finance multifamily rental housing, with a focus on supporting low- and moderate-income households and nonprofit developers in the communities that Cambridge Trust serves.

“Our decision to partner with MHP squares with our organization’s desire to build a better tomorrow for the communities we serve,” Cambridge Trust Executive Vice President and Chief Banking Officer Thomas J. Fontaine said in a statement. “We hope these funds will help develop more housing solutions for low- and moderate-income families.”

The commitment is the third-largest MHP has ever received after the $406 million Bank of America paid following its acquisition of Fleet Bank in 2004 and the $143 million Fleet paid after buying BankBoston in 1999. Unlike those payments, however, Cambridge Trust’s move is not triggered by the state law that requires the buyer of any Massachusetts-based bank to give MHP a line of credit. Instead, MHP said in a statement, Cambridge Trust wanted to address the area’s affordable housing needs and expand MHP’s own efforts.

“For three decades, private lenders have played an essential role in financing affordable housing in the Commonwealth, but Cambridge Trust has truly raised the bar by volunteering to loan $110 million to the Massachusetts Housing Partnership for the construction of new affordable units,” said Housing and Economic Development Secretary Mike Kennealy said in a statement. “From MHP’s billion-dollar legacy of providing below-market financing to the Baker-Polito Administration’s proposal to invest $1 billion in ARPA funds for affordable rental housing and homeownership opportunities, we all have a role to play to solve our housing crisis. I want to thank Cambridge Trust for acknowledging housing is an equity issue that also affects our competitiveness and commend them for being a major part of the solution.”

MHP’s new program – called the Multifamily CRA Funding Program – offers banks the ability to support affordable housing in their communities and satisfy requirements of the Community Reinvestment Act, the 1977 law that encourages financial institutions to help meet the credit needs of their communities, including low- and moderate-income neighborhoods. The program is flexible and funding can be used in conjunction with FHA-insured loans, the purchase of Fannie Mae mortgage backed securities (MBS) and tax-exempt bonds to provide more financing options for affordable housing developers and owners.

In its 30-year history, MHP has provided over $1.5 billion for the financing of over 26,000 rental apartments across the state. More than $1.2 billion of those loans came from its bank-funded loan pool. MHP’s other sources for tax-exempt and taxable financing are FHA and Fannie Mae.

“The pandemic has shined a light on our shortage of affordable housing and how it impacts the health and well-being of so many people,” Clark Ziegler, MHP’s executive director, said in a statement. “Cambridge Trust has stepped up in a big way with funding that will help us provide more affordable housing for the residents of Massachusetts.”