MassHousing and Boston Community Capital have partnered to provide $3 million in financing for energy upgrades at Powdermill Village in Westfield.

The upgrades, which will include converting the development from oil to gas heat, are expected to be completed by fall 2014.

BCC, a Boston-based community development financial institution, assembled the design team of Coldman Hartman Architects, South Mountain Co. and New Ecology, which developed a plan for mechanical system and building envelope upgrades that are expected to reduce bills by more than 30 percent, cut water and electricity use by 30 and 50 percent, respectively, as well as substantially lower ongoing maintenance and repairs costs for the property.

"Energy conservation and green technology have rapidly become an important part of financing and preserving affordable housing,” MassHousing Executive Director Thomas Gleason said in a statement. "It is expected that the many energy upgrades at Powdermill Village will result in substantial energy savings for residents and the property owner.”

One of the development’s 12 two-story buildings will be used as a "test of concept” for future work and renovated with "tight conservation” standards for windows, doors, sheathing and insulation.

Powdermill Village is owned by Peabody-Westfield LP, an affiliate of Peabody Properties Inc. BCC is funding the construction period for the project and MassHousing is providing a permanent three-year bridge loan.