Announcing CEDAC’s 2024 Annual Report

Today, CEDAC proudly released our 2024 Annual Report. The report highlights many of the impactful projects that we helped fund throughout the year.

Through our collaborations with over 41 community-based partners and more than 20 funders, we provided $44.5 million in early-stage funding and technical assistance for projects that were creating or preserving over 2,300 units of affordable housing. Our affiliate community development financial institution, Children’s Investment Fund (CIF), also had a strong year by arranging $2.1 million in loans and grants to help finance 11 early education and child care facilities. CIF’s involvement with these projects reinforces our commitment to the early success of future generations.

The report’s featured projects would not be possible without the collaboration and support of our public and private partners and funders.

Our efforts were especially important in light of the Healey-Driscoll Administration’s work with the Legislature to pass the Affordable Homes Act (AHA), the Commonwealth’s largest public investment into creating and preserving affordable housing to date. Through this historic $5.16 billion commitment, the Administration plans to support the production, preservation and rehabilitation of more than 65,000 homes across the state over the next five years.

I have had the pleasure and honor of working at CEDAC for 25 years and the FY 2024 report is a testament to the hard work of everyone in our organization, from our talented staffers to our incredible Board of Directors. While I am stepping down as executive director later this year, CEDAC and CIF are deeply committed to carry out our dual mission and support community development around the Commonwealth.

We hope the report provides insight into CEDAC’s work during the past year and inspires you to support our work in helping shape the Commonwealth’s housing future.

CEDAC Early-Stage Project Funding Q2 FY2025

CEDAC Early-Stage Funding in Q2 of FY2025 Will Help Create or Preserve Affordable Housing
in Communities Across the Commonwealth

Project funding totaled over $1.7 million in predevelopment and acquisition financing.

BOSTON (February 13, 2025) – The Community Economic Development Assistance Corporation (CEDAC) announced today that its early-stage project financing commitments during the second quarter of FY2025 will help to create or preserve affordable housing in communities across the Commonwealth. These projects will address a range of affordable housing needs including permanent supportive housing and new affordable housing production.

The total commitment of $1,724,000 in acquisition and predevelopment financing to seven (7) projects will promote affordable housing development by community development corporations and other non-profit entities in communities throughout Massachusetts, including in Athol, Hadley, and Lawrence. With these second quarter financing commitments, CEDAC has approved commitments of about $25 million to 25 affordable housing projects for the first six months of FY2025.

“CEDAC’s lending activities during the second quarter helped to advance critical affordable housing projects that will increase the number of quality housing options for individuals and families in need” said CEDAC’s Executive Director, Roger Herzog. “We look forward to working closely with our non-profit community partners to provide financing and technical assistance support on similar projects throughout the remainder of the year.”

Examples of the housing projects under development assisted by CEDAC’s Q2 FY2025 loan commitments include:

Bigelow-Riverbend Schools, Athol: NewVue Communities Inc. (NewVue) will utilize $200,000 in predevelopment lending from CEDAC to finalize its plan to redevelop the Bigelow-Riverbend Schools, historic elementary school buildings in Athol. The new building will hold a total of 53 units, with 33 units reserved for families and 20 one-bedroom units reserved for older adults (aged 55+).
The Econo Lodge Redevelopment, Hadley: Valley Community Development Corporation (Valley CDC) plans to convert the Econo Lodge Motel in Hadley into 50 units of permanent supportive housing (PSH). The units will be broken down into 39 studio apartments and 11 one-bedroom apartments. CEDAC recently committed a $400,000 predevelopment loan increase to Valley CDC for the project, in addition to previously committing to the organization $4.1 million in acquisition financing and an initial $400,000 predevelopment loan, bringing the total funding amount to $4,900,000, which will help to create more affordable housing options in the Hadley community. This is one of several hotel conversion projects that CEDAC is currently assisting, with the plan to create PSH units for homeless individuals.
Capernaum Place, Lawrence: Leveraging a $200,000 predevelopment loan from CEDAC, Lazarus House, Inc. plans to renovate Capernaum Place in Lawrence to increase the number of housing units from 20 to 25. Eighteen of the units will become permanent supportive housing with the remaining 7 units used as transitional housing.

About CEDAC

CEDAC is a public-private community development financial institution that provides project financing and technical expertise for community-based and other non-profit organizations engaged in effective community development in Massachusetts. CEDAC’s work supports two key building blocks of community development: affordable housing and early care and education. CEDAC is also active in state and national housing preservation policy research and development and is widely recognized as a leader in the non-profit community development industry. For additional information on CEDAC and its current projects, please visit www.cedac.org.

The Home Modification Loan Program and ADUs

An accessory dwelling unit (ADU) project in Sandwich, Massachusetts that was completed through the Home Modification Loan Program (HMLP). Photo Credit: Andy Levine

The Home Modification Loan Program (HMLP) is a valuable financial resource for qualifying Massachusetts homeowners. This state-funded program offers zero percent interest loans of up to $50,000 to assist homeowners who create a more accessible home by providing financing for projects such as ramps and lifts, and kitchen and bathroom modifications.

Over 3,000 people have utilized the program since 1999 to finance a broad range of capital improvements. Some families have used it to fund the paving of their driveway and others have used it to create a sensory space for their family member with autism. Another improvement that more qualifying homeowners and families might consider is the development of an accessory dwelling unit (ADU).

Accessory Dwelling Units are “secondary residential units” that are located on the same plot of land as an existing primary residence. ADUs can take several forms, from unfinished basements or garages converted to apartments to new stand-alone structures. ADUs offer great potential to increase housing production and stem the state’s housing crisis. In 2024, Governor Healey signed the Affordable Homes Act, which includes provisions to amend the zoning law and allow ADUs up to 900 sq ft to be “built by right in single family zoning districts.”

Within the parameters of the HMLP program, ADUs provide an important opportunity to create supportive housing for senior household members (age 60 and up) and family members with disabilities by enabling them to live nearby while also granting them their own private space. Additionally, ADUs require less water and electricity to operate. This alleviates financial strain on homeowners who can now provide an affordable housing solution for family members.

View this video on how HMLP could be a resource to assist with the development of your ADU project.

CEDAC Launches New Decarbonization Predevelopment Loan Program in Partnership with MHP

A rendering of the proposed deep energy retrofit, including the solar panels on the roof of the buildings, that will be constructed at Hano Homes by Allston Brighton Community Development Corporation. Photo Credit: Onion Flats Architecture

CEDAC, in partnership with the Massachusetts Housing Partnership, is launching a new predevelopment loan program to help nonprofit and resident-controlled organizations plan for decarbonization and climate resiliency in their affordable housing projects. As described in the CEDAC/MHP Predevelopment Decarbonization Loan term sheet, funding of up to $100,000 per project will be made available at a reduced interest rate of 3%.

These loan proceeds can cover not only decarbonization assessments but also other associated costs, such as design, consultant fees and engineering work, so long as the work will support sustainability and decarbonization. While the primary purpose of the program is to support green retrofit of existing buildings, some funding may also be available to support production of new, high performance affordable housing.

Decarbonization is the reduction of greenhouse gas emissions related to the energy consumption required to operate a building.[1] In multifamily housing, decarbonization can be achieved in many ways, including:

Reducing heat loss through insulation, installation of energy-efficient windows and doors, and improvements to the building envelope
Shifting away from fossil fuels as a source of energy, including use of efficient heat pump systems for heating and cooling, and using electric stoves rather than gas

The Massachusetts Clean Energy Plan calls for reductions in greenhouse gas emissions from both residential and commercial building heating systems by 28% below 1990 levels in 2025 and 47% below 1990 levels in 2030. The recently-enacted Affordable Homes Act also requires that state capital funding prioritize projects that include energy efficiency, electrification and decarbonization measures, such as:

Electric or ground source heat pumps
Net-zero developments
Passive House institute certification or equivalent
All-electric buildings and projects that incorporate green, sustainable and climate-resilient elements

The Massachusetts Draft 2025-2026 Qualified Allocation Plan issued by the Executive Office of Housing and Livable Communities (HLC) incorporates these priorities as part of its competitive scoring system. HLC expects all project sponsors to incorporate Enterprise Green Communities standards into their approach to rehabilitation and urges sponsors to incorporate other green and sustainable development characteristics as well.

In addition, many cities and towns have adopted stretch energy codes and other local laws to reduce greenhouse gas emissions, and many of these requirements apply to existing buildings. This includes Boston’s Building Emissions Reduction and Disclosure ordinance, which sets requirements for large existing buildings to reduce their greenhouse gas emissions over time.

This new CEDAC-MHP predevelopment loan program will serve as an important resource to help affordable housing owners understand both the challenges and opportunities when planning for decarbonization and sustainability in housing preservation projects.

[1] I want to decarbonize my property. What does that mean?

The Home Modification Loan Program in Berkshire County and Chicopee

The state’s Home Modification Loan Program (HMLP) continues to be a vital resource in helping seniors, homeowners with disabilities or family members with disabilities modify their homes to enhance accessibility. Since 1999, the program has provided over 3,000 households the financial assistance to implement modifications that improved quality of life and accessibility.

The Berkshire Eagle recently featured Williamstown couple Marcia and Ronald MacInnis. Since purchasing their home in 2022, the couple had largely self-funded over $112,000 to cover unexpected repairs. To pave their gravel driveway, the couple used a zero-interest HMLP loan (the maximum limit for homeowners is $50,000). Since Marcia has osteoporosis and arthritis, paving the driveway addressed an accessibility issue.

Danielle, a Chicopee homeowner and mother, used the HMLP loan to assist her daughter, who has autism. She purchased her home in 2023 and initially considered a piecemeal approach toward modification. After a friend’s recommendation and some online research, she sought out WayFinders, a Western Mass. affordable housing organization, for an HMLP application. Once paperwork was filed, Danielle’s home, built in 1925, was improved with recommendations from her daughter’s healthcare provider. It now has a sensory room, a designated space that enables her daughter to explore and develop her senses and skills safely in a controlled environment, as well as a modified bathroom and backyard. These changes ensure that her daughter has a safer home more sensitive to her unique experience.

The preceding stories are just a few examples of how the HMLP can assist homeowners make these necessary modifications. Both families have created a more accessible home without incurring a heavy financial burden. Furthermore, HMLP loans are deferred payment loans, so these homeowners will not be required to make monthly payments, with the loan repaid when they sell or transfer ownership of their respective properties. These stories also illustrate that more qualifying homeowners can be helped by the program. Another HMLP loan benefit is that homeowners can adapt their living space to suit their personal requirements, so they are able to stay longer in their chosen home without having to find alternative options. It’s another avenue for affordable housing that is available to Massachusetts homeowners.

For more information on The Home Modification Loan Program, click here.

The Home Modification Loan Program Is A “Huge Untapped Resource” For The Berkshires

The Home Loan Modification Program is helping families across the Commonwealth enhance their properties’ accessibility. The story below from The Berkshire Eagle features a Williamstown couple that recently utilized the HMLP to help improve the home they purchased two years ago. Despite the significant benefits, the couple was only one of a few residents in Berkshire County to take advantage of the loan program. One of those benefits: the loan only has to be repaid if sells or transfers their property within the loan’s 50-year mortgage period. Furthermore, the income limit to apply for a loan rests at almost $300,000 for a family of four.

The Home Modification Loan Program is a “huge untapped resource” for the Berkshires. Here’s how it works. Read More

CEDAC Early-Stage Project Funding Q1 FY2025

For Immediate Release
Media Contact:
Macsonny Onyechefule – Seven Letter
macsonny@sevenletter.com

CEDAC Early-Stage Funding in Q1 of FY2025 Will Help Create or Preserve Affordable Housing
in Communities Across the Commonwealth
Project funding totaled over $23 million in predevelopment and acquisition financing.

BOSTON (November 4, 2024) – The Community Economic Development Assistance Corporation (CEDAC) announced today that its early-stage project financing commitments during the first quarter of FY2025 will help to create or preserve affordable housing in communities across the Commonwealth. These projects will address a range of affordable housing needs including permanent supportive housing for formerly homeless individuals, new affordable housing production, and the preservation of existing subsidized housing.

The total commitment of more than $23 million in acquisition and predevelopment financing to eighteen projects will promote affordable housing development by community development corporations and other non-profit entities in communities throughout Massachusetts, including Easthampton, Erving, Groveland, Ipswich, Lynn, and Natick.

“CEDAC is pleased to assist with the predevelopment and acquisition funding of these new projects,” said CEDAC’s Executive Director Roger Herzog. “If the first quarter is any indication, 2025 will be another year of substantial collaboration as our non-profit partners address the need and develop more affordable and supportive housing across the Commonwealth that will help so many families.”

Examples of the housing projects under development assisted by CEDAC’s Q1 FY2025 loan commitments include:

385 Main, Easthampton: The Community Builders (TCB) and Kestrel Land Trust (Kestrel) have entered into a joint venture to acquire a 53-acre site and create a model of affordable housing and land conservation. Using $400,000 in CEDAC predevelopment financing, TCB plans to develop the 10-acre site into a multifamily residential project of 87 new extremely low- to moderate-income homes. The additional 43 acres, which contains many sensitive riparian habitats, forested land, and meadows, will be preserved by Kestrel Land Trust as publicly accessible open space. The housing units will be created for households with incomes ranging from at or below 30% AMI up to 80% AMI.

Care Drive Housing, Erving: In 2023, the Town of Erving Selectboard released an RFP to develop senior housing and chose Rural Development, Inc.’s (RDI) proposal to be the designated developer of the site. Using $227,553 in predevelopment financing from CEDAC, RDI proposes to develop the first affordable housing project in the Town of Erving. RDI will develop 18 new affordable senior (62+) 1-bedroom apartments and eight new affordable family townhomes. Current affordability targets are eight units at 30% AMI, four units at 50% AMI, and six units at 60% AMI.

Garrison Village, Groveland: Using $400,000 in predevelopment financing from CEDAC, Bethany Community Services (BCS) plans to construct a three-story building of 45 one-bedroom units for mixed-income seniors (62+). Thirty-seven units will be at or below 60% AMI, including eight units at 30% AMI. There will be five units at 80% AMI and three market-rate units.

Depot Lane, Ipswich: Using $350,000 in predevelopment financing from CEDAC, Harborlight Community Partners (HCP) will demolish an existing vacant commercial building and construct 52 units of affordable and transit-oriented rental housing for families. All units will be affordable to households earning less than 60% AMI. Sixteen units will be restricted to households earning less than 30% AMI.

High Street, Lynn: The Neighborhood Developers (TND) in partnership with the Latino Support Network (LSN) will acquire a site with $2.3 million in acquisition lending from CEDAC and will use an additional $270,000 in predevelopment financing to prepare to build 70 affordable rental units. All the units will be affordable to households at or below 50% AMI, including 22 units for households at or below 30% AMI.

21 Oxford Street, Lynn: Commonwealth Land Trust (CLT) plans to construct a five-story building with 40 units of permanent supportive housing using $400,000 in predevelopment financing from CEDAC. All units will be affordable, with 10 units at 30% AMI or below and the remaining 30 units at 50% AMI or below, with a request for eight project-based Section 8 vouchers and 20 enhanced-MRVPs.

5 Auburn Street, Natick: Metro West Collaborative Development (MWCD) was designated by the Town of Natick to redevelop a historic school building. Using $400,000 in predevelopment financing from CEDAC, MWCD proposes to create 32 affordable homes for families on the site, within the existing historic building and in a new construction building on the site. All units will be affordable for households earning 60% AMI or less, with half of all units affordable for families earning 30% AMI or less.

About CEDAC

Amicus Brief Filed in SJC Case with Much at Stake for Preserving Affordable LIHTC Units

In INSITES this week: CEDAC, together with three other Massachusetts public agencies^[1], filed an amicus brief on August 16, 2024 with the Massachusetts Supreme Judicial Court (“SJC”) in a case^[2] that could have a significant impact on nonprofits’ ability to preserve long-term affordability in Low Income Housing Tax Credit (“LIHTC”)^[3] projects. Oral arguments were presented on September 9, 2024, before the SJC.

The LIHTC Nonprofit Right of First Refusal

Congress created a statutory Right of First Refusal under Section 42 of the tax code (“Section 42 ROFR”), allowing a nonprofit to acquire a LIHTC property at a below-market price after the end of the initial 15-year LIHTC compliance period. As the SJC recognized in a landmark 2018 Massachusetts case, Homeowner’s Rehab, Inc. v. Related Corporate V SLP, L.P. (“HRI”), the Section 42 ROFR furthers “one of the key policy goals of the LIHTC program, which is to ensure that affordable housing remains affordable in the long term.” Nevertheless, over the past several years, some investors that have acquired interests in LIHTC projects have tried to undermine this statutory tool. Referred to by some industry participants as “aggregators”, these parties – including one of the defendants in both HRI and the Tenants’ Development Corporation (TDC)/South End Tenants Houses II (TDC/SETH II) case, Alden Torch Financial, LLC – have been involved in litigation around the country, attacking nonprofit exercise of Section 42 ROFRs.

In HRI, the SJC agreed that a LIHTC project’s non-profit controlled general partner could trigger the Section 42 ROFR without the investor’s consent. However, the Court’s ruling was based on the specific language of the parties’ transaction documents, leaving open the door to the TDC/SETH II challenge. HRI also did not address how the minimum Section 42 ROFR price must be calculated – a key issue in TDC/SETH II.

TDC/SETH II

Relying on HRI, the trial court in TDC/SETH II had also ruled that the investor’s consent was not required for TDC, a property management and development organization focused on preserving and maintain affordable housing, to acquire the SETH II development property under its Section 42 ROFR. The court stated that “Presuming that an Investor Partner has broad consent rights over the exercise of a Section 42 ROFR, without clear contractual language indicating this intent of the parties, would effectively appoint the proverbial fox to guard the chicken coop . . . [A]n analysis of the Partnership Agreement’s consent rights without reference to the language and purpose of the ROFR Agreement is nonsensical.” However, the court accepted the investor’s arguments that the Section 42 ROFR price should include, not just the capital gains taxes owed on the sale of the real estate, but also taxes that the investor would have to pay when the LIHTC partnership was liquidated – a difference worth roughly $8 million.

In their amicus brief, CEDAC, the Commonwealth, the City of Boston and Massachusetts Housing Partnership (MHP) emphasized the plain language of the tax code. Because the code treats liquidation taxes as a separate obligation from taxes on sale of real estate, the wording “all federal state and local taxes attributable to the sale” in Section 42 (LIHTC) should not be read to include liquidation taxes. The brief also highlighted the public purpose underlying the statutory Section 42 ROFR. Requiring payment of liquidation taxes would result in a windfall for the investor, diverting scarce affordable housing resources and making it harder for nonprofit organizations to exercise Section 42 ROFRs and preserve long-term affordability. Finally, the brief urged the SJC to uphold the trial court’s decision that investor consent was not required for TDC to exercise its Section 42 ROFR.

The SJC will now take a few months to issue its decision. Much is at stake for housing preservation. Before the current wave of aggregator challenges, transaction documents often simply assumed that investor consent rights did not apply to the Section 42 ROFR. If the SJC confirms that investor consent is not required unless explicitly called for in the transaction documents, that would help nonprofits preserve LIHTC housing without suffering costs and delay from years of litigation.

In an era of scarce resources, the issue of the Section 42 ROFR price assumes even greater importance than it has in the past. A decision clarifying that the “taxes attributable to the sale” that must be included in the Section 42 ROFR price refers only to taxes on the sale of the real estate itself would protect scarce public resources and increase the number of developments that can be preserved.

[1] Also joining in the brief were the Commonwealth of Massachusetts, acting by and through its Executive Office of Housing and Livable Communities, the City of Boston acting by and through its Mayor’s Office of Housing, and the Massachusetts Housing Partnership. Nolan Sheehan Patten LLP drafted the brief for CEDAC and the other agencies.

[2] Tenants’ Development Corporation and Tenants’ Development II Corporation v. Amtax Holdings 227 et al., No. SJC-13564, involving a LIHTC project known as SETH II. This article will refer to the case as “TDC/SETH II”.

[3] For more information about the LIHTC, see An Introduction to the Low-Income Housing Tax Credit, a Congressional Research Service report last updated April 26, 2023.

Healey-Driscoll Administration Announces Capital Grants to Child Care Facilities

CIF Director Theresa Jordan, Education Secretary Patrick Tutwiler, State Representative Adrian Madaro, East Boston Social Centers (EBSC) Executive Director Justin Pasquariello, Senator Sal DiDomenico, an EBSC educator and student, and EEC Commissioner Amy Kershaw.

Last Monday, the Healey-Driscoll administration announced that 20 programs from across Massachusetts will receive a combined $8.5 million in funding which will aid in updating their facilities. The announcement was made at an event hosted by Education Secretary Patrick Tutwiler and Early Education and Care Commissioner Amy Kershaw. East Boston Social Centers served as the venue for the day’s ceremonies.

The grants provide programs with the financial resources to create safe and modern environments for children. Lt. Governor Driscoll notes that the funds will enable the programs to make improvements related to energy efficiency, ventilation, safety, security, and outdoor play.

The funding is administered by the partnership of the Department of Early Education and Care (EEC), CEDAC, and its affiliate, the Children’s Investment Fund (CIF). The sources of funding for these grants include the Early Education and Out of School Time (EEOST) Capital Fund for non-profit organizations and the Early Education and Care Provider Capital Grant (EECPCG) for for-profit organizations. The EEOST Capital Fund was recently reauthorized for $50 million over the next several years through the Affordable Homes Act, the $5.16 billion legislation passed in August to increase affordable housing in the state.

The awards range from $200,000-$500,000. East Boston Social Centers, Kid-Start in Lawrence, L.P. College in New Bedford, and North Adams’ Child Care of the Berkshires were among the awarded programs. CIF anticipates another announcement of funding for the EEOST Capital Fund’s large grant program later this fall.

Request for Proposals for the Small Property State Acquisition Fund (SPAF) Pilot Program

On behalf of the Executive Office of Housing and Livable Communities (EOHLC), the Community Economic Development Assistance Corporation (CEDAC) is pleased to announce a Request for Proposals for funding under the Small Property State Acquisition Fund (SPAF) Pilot Program.

This Pilot Program offers acquisition financing to eligible nonprofit housing organizations of up to $450,000 for the purchase of existing residential properties of 1-8 units. We will begin to accept applications on August 1, 2024 with an application deadline of September 13, 2024.

The SPAF Pilot Program guidelines and the application form can be found here. Applications should be submitted via email to spaf@cedac.org. You may also submit any questions on this Pilot Program to this same email address.

We look forward to working with you on this Pilot Program.

Small Property State Acquisition Fund (SPAF) Pilot Program Overview

The Small Property Acquisition Fund (SPAF) Pilot Program provides deferred payment loans to non-profit sponsors to support the acquisition of existing residential properties of 1-8 units. The goal of the program is to prevent displacement of tenants threatened by the forces of gentrification and to create long-term affordable rental and ownership housing by facilitating the acquisition of existing small properties by nonprofit corporations. SPAF loans are intended to supplement other acquisition soft loans administered by municipal or other affordable housing acquisition lenders. CEDAC has approximately $900,000 in ARPA funds available for this pilot round. SPAF loan amounts will be at least $225,000 and no larger than $450,000 per project. Loans will be for terms of 30-50 years and will not accrue interest.

About CEDAC