Affordable Homes Act: Quick Guide to Funding

The Affordable Homes Act (H. 4977) marks a historic investment in communities across the Commonwealth. It authorizes $5.16-billion in spending for housing development and associated projects. Certain funds have been established to target investments for green retrofits, artist housing, homes for first-time buyers and so much more. With all of this investment ready to be mobilized, it can be hard to know what funding may be available.

This quick guide to Affordable Homes Act funding explains what each fund does, who is eligible, the types of financial assistance available, and any restrictions that may be tied to funds. Many details associated with administrative priorities and disbursements are likely to change as agencies finalize rules. However, this first look at funding opportunities should help to prepare for what may come.

Affordable Housing Trust Fund (7004-0072) - $800,000,000

Description: Capitalizes the Affordable Housing Trust Fund for creation and preservation of affordable housing.

Eligibility: Projects owned or sponsored by non-profit or for-profit organizations who are current on all existing mortgage obligations with the Commonwealth. Prioritization given to projects that comply with decarbonization and sustainability (see 225 CMR 22.00, 23.00) and Enterprise Green Communities standards. Any projects proposing less than full compliance with standards shall provide detailed infeasibility analysis.

Funding Opportunity: Not more than $50,000,000 may be used to create opportunities for first-time homebuyers. Funding is allowable for down payment assistance, mortgage insurance, mortgage interest subsidy, counseling and financial literacy programs

Affordability Restrictions: Beneficiaries are not to exceed 110% AMI.

Housing Choice Grant Program (7004-0077) - $35,000,000

Description: Local capital projects grant program for MBTA Communities compliance. Click here to see which communities are currently in compliance.

Eligibility: Communities that have demonstrated housing production and adoption of housing best practices, including MBTA Communities.

Sustainable and Green Housing Initiatives (7004-0078) - $275,000,000

Description: Supports acceleration of innovative strategies for production of mixed-income housing and other market transformation activities, including re-use of commercial space, modular/manufactured housing, ADUs, and other efforts as determined by the Executive Office of Housing and Livable Communities (HLC).

Eligibility: Qualified for-profit and nonprofit developers or housing organizations, community development corporations, local housing authorities, community action agencies, and other governmental agencies.

Funding Opportunity: Awards shall promote geographic, social, racial and economic equity. Projects that comply with decarbonization and sustainability standards will be prioritized. Transit-oriented and mixed-use projects will be prioritized. The commercial portion of a mixed-use project shall not exceed 25% of the total development cost or $1-million, whichever is less.

Affordability Restrictions: 110% AMI with priority given to projects that provide higher and deeper levels of affordability. At least 25% of residents assisted shall not exceed 60% AMI.

Middle-Income Housing Fund (7004-0080) - $100,000,000

Description: To fund housing development administered by the Massachusetts Housing Finance Agency (MassHousing).

Eligibility: To be determined by MassHousing.

Funding Opportunity: To be determined by MassHousing.

Affordability Restrictions: For households earning up to 120% AMI.

Smart Growth/40R (7004-0079) - $20,000,000

Description: To provide density bonus payments from the Smart Growth Housing Trust Fund for each housing unit of new construction that is created in a smart growth zoning district. Click here for more information on Chapter 40R.

Eligibility: Communities with compliant Smart Growth Zoning Districts.

Funding Opportunity: See 760 CMR 59.06 - Smart Growth Zoning Overlay District: Payments and Repayments.

CommonWealth Builder (7004-0081) - $100,000,000

Description: For production of below-market rate homes for first-time homebuyers and socially and economically disadvantaged individuals.

Eligibility: New developments and retrofits of existing units are both eligible. Projects must have at least ten units for eligibility. Prioritization will be given to projects that comply with decarbonization and sustainability standards.

Funding Opportunity: Grants and loans may include a requirement for matching funds.

Affordability Restrictions: 120% AMI with preference to projects restricted at 80% AMI.

Neighborhood Stabilization (7004-0085) - $50,000,000

Description: To revitalize neighborhoods and communities with blighted properties.

Eligibility: Municipalities and their subdivisions, community development corporations, or non-profits. Projects must have previously been cited for building or sanitary code violations or be subject to cancellation of commercial property insurance due to substandard conditions.

Funding Opportunity: State financial assistance subsidizing the purchase price, borrowing, demolition, or renovation costs on projects of up to 50 rental units or 1 to 4 ownership units.

Affordability Restrictions: Rehabilitated housing will remain affordable for a duration to be determined by HLC accounting for market conditions and stabilization needs.

Momentum Fund (7004-4784) - $50,000,000

Description: For development of mixed-income and workforce multifamily housing.

Eligibility: To be determined by MassHousing.

Funding Opportunity: Capital funding in the form of debt, equity, or other instruments. Repayment terms will be based on the individual needs of the project.

Affordability Restrictions: At least 20% of units in a project receiving assistance must be restricted to incomes between 60% - 120% AMI.

Geographic Restrictions: Geographic equity will be prioritized. $13-million is restricted for development of affordable units at 1234-1240 Soldiers Field Road by the Boston Planning Department.

SIGMA Fund (7004-0078) - $275,000,000

Description: For sustainable, innovative, and green housing initiatives to accelerate new strategies including repurposing commercial/office space, modular/prefabricated construction, ADU/co-housing, and other HLC-approved pilot programs. Transit-oriented mixed-use developments are incentivized, so long as financial subsidies for commercial components do not exceed 25% of commercial development costs or $1-million. HLC may provide financial support to developers who set aside additional transit-oriented units for affordability above levels designated in a municipality’s inclusionary zoning ordinance.

Eligibility: Qualified for-profit or non-profit developers, community development corporations, local housing authorities, community action agencies, and government bodies.

Funding Opportunity: No interest loans, grants, subsidies, credit enhancements, and other financial assistance approved by HLC.

Affordability Restrictions: Not more than 110% AMI, with priority given to projects providing higher and deeper levels of affordability. At least 25% of residents served must have incomes not exceeding 60% AMI.

MA Rehab Home Modification Program (7004-0069) - $60,000,000

Description: Allows homeowners and landlords to rehab homes or build ADUs to improve accessibility for blind or severely disabled residents.

Eligibility: Not more than 10% shall be used for grants to assist landlords with prospective tenants who are unable to maintain or secure permanent housing but for the grant. All other homeowners and landlords may be eligible.

Funding Opportunity: Loans or grants.

Affordability Restrictions: Program may be restricted by income eligibility standards approved by the Executive Office of Health and Human Services.

Facilities Consolidation Fund (7004-0070) - $70,000,000

Description: For the development of community-based or supportive housing for individuals with mental illness or developmental disability.

Eligibility: Non-profit or for profit organizations subcontracting with the Massachusetts Development Finance Agency, the Community Economic Development Assistance Corporation, the Massachusetts Housing Finance Agency, or other operating agencies. Preference for subcontracting with agencies shall be given to nonprofits. Prioritization given to projects that comply with decarbonization and sustainability standards (see also 225 CMR 22.00, 23.00). Any projects proposing less than full compliance with such standards shall provide detailed infeasibility analysis.

Funding Opportunity: Loans shall not exceed 50% of the financing of the total development costs. Loan terms are not to exceed a 30-year period but may be extended for10 years if needed. If repayment would cause a project to become ineligible for federal financial assistance, HLC may waive repayment requirements that cause ineligibility. Not more than $10,000,000 may be used for a pilot program.

Affordability Restrictions: May be restricted to households at or below 15% AMI.

Geographic Restrictions: HLC shall consider a balanced geographic plan for loan issuance.

Community Based Housing (7004-0071) – $55,000,000

Description: Supplements Facilities Consolidation Fund (7004-0070) for the development of community-based or supportive housing for people who are at risk of or who are institutionalized, and are not eligible for housing developed under the Facilities Consolidation Fund.

Eligibility: All housing developed shall be integrated housing, likely meaning no more than ⅓ of units are reserved for low income households or individuals (see 760 CMR 19.02). Preference for subcontracting with agencies shall be given to nonprofits. Prioritization is given to projects that comply with decarbonization and sustainability standards (see also 225 CMR 22.00, 23.00). Any projects proposing less than full compliance with such standards shall provide detailed infeasibility analysis.

Funding Opportunity: Loans shall not exceed 50% of the financing of the total development costs. Loan terms are not to exceed a 30-year period but may be extended for 10 years if needed. If repayment would cause a project to become ineligible for federal financial assistance, HLC may waive repayment requirements that cause ineligibility.

Affordability Restrictions: Units must remain affordable for the duration of the loan term, but affordability levels are unspecified. Because this program is designated for individuals who do not qualify for Facilities Consolidation Fund units, units likely must remain affordable to those above 15% AMI.

Geographic Restrictions: HLC shall consider a balanced geographic plan when issuing loans.

Housing Stabilization and Investment Trust Fund (7004-0073) - $425,000,000

Description: Develops and supports the acquisition, preservation, new construction and rehabilitation of affordable housing, including assistance for energy audits and housing modification to achieve energy efficiency.

Eligibility: Projects owned or sponsored by non-profit or for-profit organizations who are current on all existing mortgage obligations with the Commonwealth. Prioritization is given to projects that comply with decarbonization and sustainability (see 225 CMR 22.00, 23.00) and Enterprise Green Communities standards. Any projects proposing less than full compliance with standards shall provide detailed infeasibility analysis.

Funding Opportunity: Grants or loans. At least 25% ($106,250,000) shall be used for preservation and production of housing restricted at 30% AMI. If HLC has not spent 25% by the end of the fiscal year then the remainder may be spent for unrestricted housing preservation and production. At least $10,000,000 shall be spent on the Small Properties State Acquisition Funding pilot program. Soft loans shall be available to affordable housing lenders and municipalities on a rolling basis for the acquisition of 1-8 unit or mixed-use buildings on a 30-year term.

Affordability Restrictions: Soft loan acquisitions must follow the affordability restrictions of the lender.

Community Planning Grants (7004-0082) - $25,000,000

Description: To support culturally competent, multi-lingual planning and locally-driven initiatives related to community development, housing production, workforce training and economic opportunity, childcare and early education initiatives, and climate resilience initiatives.

Eligibility: Municipalities and regional applicants. Preference will be given to minority-owned businesses located in low- or moderate-income areas.

Funding Opportunity: Grants and technical assistance.

Public Housing General Fund (7004-0074) - $2,000,000,000

Description: For renovation, remodeling, reconstruction, redevelopment, hazardous material abatement, provision of day care or other learning centers, with preference given to projects for compliance with state and federal codes and laws.

Eligibility: Housing authorities, with subcontracting available. Contracts will be awarded subject to G.L. c. 149, §§ 44A-44H governing competitive bids.

Funding Opportunity: Grant funding. A portion of this funding will be reserved for a long-term, flexible use CIP program. At least $15-million is reserved for increased accessibility to public housing for persons with disabilities. Not more than $150-million may be used for projects that include sustainability and decarbonization elements. However, projects that include lower embodied carbon construction materials and methods will be prioritized.

Affordability Restrictions: At least 25% of funds shall be reserved for housing people with incomes not greater than 30% AMI.

Geographic Restrictions: At least $99-million is reserved for the Boston Housing Authority’s Faneuil Gardens development.

Public Housing Mixed Income Housing Demonstration (7004-0075) - $200,000,000

Description: To demonstrate cost effective revitalization methods for state-aided family and elderly-disabled public housing.

Eligibility: Housing authorities with state-aided housing developments. Housing authorities will be required to demonstrate innovative and replicable solutions to the needs of public housing eligible residents. Grant recipients may be exempted from G.L. c. 7C and 121B and regulatory requirements with a showing of necessity to accomplish effective revitalization of public housing without adverse effects on residents.

Funding Opportunity: Grants for technical assistance provided by the Community Economic Development Assistance Corp. or the Massachusetts Housing Partnership Fund.

Geographic Restrictions: Geographic equity will be considered in grant awards. Regional collaboration among housing authorities is encouraged. Proposals on municipally- or authority-owned land or underutilized public housing sites are encouraged.

Housing Innovation Trust Fund (7004-0076) - $200,000,000

Description: Capitalizing the Housing Innovation Trust Fund (G.L. c. 121E § 2) to facilitate the production and retention of alternative forms of rental and ownership housing. Prioritization will be given to projects that comply with decarbonization and sustainability standards, and those providing transitional or permanent housing for homeless and disabled residents.

Eligibility: Public and quasi-public entities.

Funding Opportunity: Grants and loans.

Affordability Restrictions: At least 25% of funds shall be used for preservation and production of housing restricted at 30% AMI. At least 50% of funds shall be similarly restricted at 80% AMI.

Geographic Restrictions: Geographic equity will be considered in grant awards.

State Surplus Property Disposition (1100-2518) - $30,000,000

Description: To expand affordable housing production on underutilized state property.

Eligibility: Available to state agencies and building authorities.

Funding Opportunity: For planning and studies, demolition, remediation, construction and relocation of utilities, predevelopment and site preparation. DCAMM may transfer funds, project control and supervision to the eligible agency for projects involving structural or mechanical work whose estimated cost is less than $5-million. Funds, control and supervision will be transferred if there is no structural or mechanical work, or the estimated cost is less than $250,000.

Local Projects (1599-1953) - $425,756,900

Description: Earmarks for local projects.