Financing Solutions
Putting bank & local funds to work
Part of MHP’s mission is to pioneer new financing. The best example is our $1.5 billion bank-funded loan program. Designed and administered by MHP, with a funding mechanism embedded in state banking law, these bank funds have provided long-term, fixed-rate financing for the development and preservation of more than 27,000 rental housing units.
MHP’s financing has been bolstered in recent years by almost $300 million in new capital. These loan funds came to us in two ways - by state statute through bank acquisitions and through voluntary agreements, a new option MHP has developed to expand its privately funded lending platform. In 2021, Cambridge Trust committed $110 million through this new option. Berkshire Bank and Needham Bank have also made voluntary commitments.
Why are bank funds important? “Their availability provides competitive pricing and greatly simplifies the process of locking interest rates for developments with construction loans,” said Megan Mulcahy, MHP’s director of lending.
In addition to bank funds, MHP’s community assistance team works to bring Community Preservation Act, housing trust and other local funds into the mix. Much of this work has happened since 2005, when state law changes made Municipal Affordable Housing Trusts more effective. Since then, the number of MAHT’s in Massachusetts have grown from 12 to over 135 and MHP has provided technical support to 73 percent of the state’s housing trusts.
“Local funds have become an essential extra ingredient in creating affordability,” said Laura Shufelt, MHP’s director of community assistance. “This and our private funds make it possible for the Commonwealth’s public resources to have the most impact in creating long-term affordability.”
Bank funds gives MHP the ability to offer competitive pricing and lock in interest rates for developments with construction loans