1

MHP: Flexible, Reliable & Affordable

Massachusetts

Housing

Partnership

160 Federal Street

Boston, MA 02110

617-330-9955

www.mhp.net

Windsor Woods, Canton

2

Overview

•Privately-funded, public, self-supporting non-profit organization

that works to increase the supply of affordable housing in MA.

•Funded by banking industry due to a 1990 one-of-a-kind state

law that requires companies that purchase MA banks to make

funds available to MHP.

•Since 1990, loan pool has grown to over $1.1 billion and MHP

has made over $745 million in loans for the financing of over

17,700 units of rental housing.

•30 year amortization and term of 5 to 20 years and OneSource

partnership with construction lenders.

•MHP provides the permanent financing for more 9% tax credit

projects in MA than any other lender.

3

Primary Loan Products

•Affordable Channel Partnerships with FNMA gives us the ability

to exceed our in-house loan limit.

• We are an FHA public mortgage who administers IRP

agreements and preservation of expiring use properties is a

primary mission goal.

•Tax-exempt financing: MHP provides triple-A credit enhancement

for bonds.

•MHP provides Project Eligibility Letters and financing for

developers seeking to use the state override zoning law, Chapter

40B.

4

Private Placement Bond Program

In partnership with MHP, funding banks with CRA goals and

construction/bridge loan programs buy the bonds.

•Avoids public bond underwriting, rating, and sales costs.

•Avoids negative arbitrage.

•Lower interest rates today than public execution.

Public Triple-A 30/20=4.95%

Taxable today would be 4.18%!

•Bridge loan insures 51% test met.

•OneSource savings on legal, appraisal, and inspections.

•No prevailing wage requirement.

5

Private Placement Bond Program cont.

•Lender fees typically 0.75%-1% on construction bridge and

0.5%-1% on permanent.

•Permanent loan 30/20 with two year forward pricing available.

•For tenant in-place rehab, construction funds are advanced from

escrow with no separate construction loan required.

•Construction period bond is a low floater, draw-down bond

serviced directly by the funding bank today typically 2.75%-3.25%

over Libor.

•Today’s rate indications:

Immediate: 3.63%

Two-year Forward: 4.38%

6

HUD Rental Assistance Demonstration

(RAD)

•Will bring some new 20 year, project-based vouchers to

developments with moderate rehab and RAP S.8 contracts.

Facilitates long-term debt and the opportunity for 4% tax credits.

•If Mod Rehab and RAP projects were previously given enhanced

vouchers, these can now be project-based.

•While LIHTC investors continue to seek reserves against

overhang risk, MHP continues to underwrite the full contract term.

HUD is working on early contract renewal for 20 year terms.

•Expanded public housing authority could present opportunities to

join venture.

7

Hsg Development Incentive Program

(HDIP)

•State tax credits and real-estate tax exemptions for 50+ unit

renovation/reuse projects in Gateway Cities with at least 80%

market-rate units.

•MHP Community Revitalization Option requires only 10% at 80%

AMI.

•MHP can finance mixed commercial/residential projects.

•MHP can finance TIF separately.

8

Quail Run, Stoughton Atlas Lofts, Chelsea

Freedom Village, West Boylston Wilber School, Sharon

More information

Dick Mason

dmason@mhp.net

617-330-9944 x242

www.mhp.net/rental_financing