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At its May 8, 2007 meeting, MassHousing’s Board of Directors approved a $6.7 million loan to preserve affordability at Heritage House, a 101-unit elderly housing development in Newburyport. Heritage House is the fifth property to be refinanced through MassHousing's Section 8 Preventative Preservation Program, which seeks to extend affordability at developments whose Section 8 HAP contracts expire in less than five years.
“Preserving affordable rental housing has proved to be an effective strategy in addressing the housing crunch in Massachusetts,” said MassHousing Executive Director Thomas R. Gleason. “This loan and the program through which it was made illustrate our commitment to preventing affordable housing from converting to market-rate. And most importantly, low-income seniors in Newburyport will have a viable housing option for many years to come.”
Heritage House, which is located on Low Street near downtown Newburyport, is comprised of 80 one-bedroom units and 21 two-bedroom units. The U-shaped building ranges in height from two to six stories, and includes a courtyard, community room and solarium. All but one of the units are supported by a Section 8 HAP contract.
The existing mortgage on the property was set to mature in February 2011, at which time the development would have been eligible to convert to market rate. Under this loan agreement, the owner of Heritage House has agreed to extend the Section 8 contract in 2011 for the longest possible term--currently 20 years--thereby maintaining affordability through 2031. In addition, a portion of the loan proceeds will be used to fund various improvements and updates at the 26-year-old development, including elevator upgrades, window replacements and common area renovations.
“WinnDevelopment is excited about participating in this new preservation program and continuing our long standing and fruitful relationship with MassHousing,“ said Gilbert J. Winn, Vice President of WinnDevelopment. “As a result of this refinancing, our residents will enjoy numerous building improvements as well as the comfort of knowing that there will continue to be a place for them at Heritage House for many more years to come.”
"Heritage House is a tremendous resource for seniors in Newburyport because it allows them to remain in the community where they grew up and provides a supportive living environment," said State Representative Michael A. Costello. "I want to thank MassHousing and WinnDevelopment for their efforts to help preserve and improve the building."
The borrower is Low Street Associates, LLC, whose principals are Arthur Winn, Michael Putziger and Sam Ross. The developer is WinnDevelopment and the management agent is Winn Managed Properties LLC, an affiliate of WinnResidential. MassHousing Preserves Affordability of 101 Units of Housing for Seniors in Newburyport About the Section 8 Preventative Preservation Program.
The Section 8 Preventative Preservation Program targets a group of 71 affordable rental developments that were originally financed by MassHousing and are eligible to convert to market rate between 2009 and 2013. Each of these developments receives a subsidy from HUD that is used to help pay the tenants' rents each month. However, if the mortgage is paid off, there are no more affordability restrictions or any incentives from HUD to keep the properties affordable unless the owner agrees to renew the Section 8 contract. Through this program, MassHousing now provides those incentives.
About MassHousing
The Massachusetts Housing Finance Agency, now doing business as MassHousing, is the leading provider of affordable housing in Massachusetts. Since 1970, MassHousing has provided more than $9.9 billion in financing for more than 88,000 units of mixed-income rental housing and more than 50,000 mortgage loans for homeowners. For more information, visit the MassHousing website at www.masshousing.com.
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