BOSTON – July 21, 2020 – MassHousing has provided a total of $30.3 million in affordable housing financing to the Fenway Community Development Corporation for the refinancing, major renovation, and preservation of affordability for mixed-income households at the 97-unit Newcastle Saranac in Boston's South End.
Fenway CDC—in partnership with the Schochet Companies—acquired Newcastle Saranac through Chapter 40T, after the MassHousing Section 13A mortgage expired in March 2018 and the former owner intended to sell the property, putting the property’s 97 affordable units at risk of converting to market-rate rents.
"The deep affordability of these units for nearly a hundred households, contrasted with the rents of market-rate housing in the area, made their preservation especially critical for maintaining the vibrancy and diversity of the neighborhood," said MassHousing Executive Director Chrystal Kornegay. "Thanks to a strong collaborative effort by the Commonwealth, the City of Boston, the Community Economic Development Assistance Corporation, the Fenway CDC, the Schochet Companies and the residents of Newcastle Saranac, the community will see affordable homes preserved and substantially renovated. MassHousing is pleased to be a partner in this important transaction."
"In Boston, we are committed to creating safe, stable housing for all Boston residents. I am proud that, together with our partners, we have been able to preserve the affordability of 97 homes in Boston," said Mayor Martin J. Walsh. "We will continue to preserve and grow our affordable housing stock in Boston, and the acquisition and renovation of this building will ensure that residents living here will not be priced out of their homes."
"Closing on this project in the midst of COVID-19 did not make this already very complex transaction any easier, but the public partners for this project truly went above and beyond to make sure it could close in time to get construction safely started. At one point I think we had someone from nearly every Department at the City working on this project – during COVID – to make sure it crossed the finish line," said Leah Camhi, Executive Director of Fenway CDC. “I want to extend my sincerest gratitude and thanks to everyone at the City of Boston, CEDAC, MassHousing, and DHCD who helped make the Newcastle-Saranac Apartments project feasible. We could not have preserved and rehabbed these units without working with our public partners.”
"Now, with ever more economic uncertainty coming our way we are beyond thrilled that these 97 units are preserved as affordable housing forever," said Schochet CEO Richard Henken. "These are great, beautiful properties in an outstanding location, and we are excited for the families who call them home now and will in the future."
"Last year, we joined Boston’s Mayor Marty Walsh, Chrystal Kornegay of MassHousing, Massachusetts Department of Housing and Community Development officials, several of our participating lenders, and a diverse group of stakeholders, including advocates and residents, to celebrate the preservation of the Newcastle Saranac Apartments. We offered the largest loan in our 40-plus year history – $29 million – to ensure that residents can stay in their homes and this housing will remain affordable in perpetuity," said Roger Herzog, CEDAC's Executive Director. "CEDAC offers its congratulations to all of the public and private partners, and especially to our development partners, Fenway CDC and the Schochet Companies, for achieving this important milestone in ongoing efforts to preserve the existing stock of affordable housing in Boston and across the state."
MassHousing is providing Fenway CDC with a $17.6 million tax-exempt construction and permanent loan, a $10.5 million tax credit equity bridge loan, and $2.25 million in Section 13A preservation financing.
The transaction also involved $15.5 million in equity from the allocation of federal Low Income Housing Tax Credits by the Massachusetts Department of Housing and Community Development (DHCD) with R4 Capital as the tax credit investor, $9 million in Section 13 preservation financing from DHCD and $1.55 million in DHCD National Housing Trust financing, $3 million from the City of Boston’s Department of Neighborhood Development (DND), $2.1 million in Fenway CDC sponsor loans, and an estimated $585,571 in income during construction. The Community Economic Development Assistance Corporation (CEDAC) provided $29 million in acquisition financing in a previous transaction. The City of Boston contributed $9.1 million in BPDA linkage funds toward the acquisition.
The Section 13A financing from MassHousing and DHCD resolves the expired 13A rental subsidy at Newcastle Saranac and helps prevent the property from potentially converting to market-rate rents.
The Commonwealth’s Section 13A program was created by the Massachusetts Legislature in the 1970s to provide low-interest mortgage financing to affordable housing communities. Today, 13A communities serve some of the lowest income and most vulnerable populations in Massachusetts, including many elderly residents. The mortgages on these 13A housing communities are nearing or have reached maturity.
In response, MassHousing and DHCD have committed a total of $100 million in capital to help preserve affordable 13A units that otherwise would convert to market rates.
Planned improvements at Newcastle Saranac include significant site work, building envelope upgrades and extensive apartment upgrades. The brick, walkup buildings, Newcastle Court and the Saranac Building, which were built in the early 1900s at 599 and 627 Columbus Ave., have not been renovated since the 1970s.
There are 8 studio apartments, 29 one-bedroom apartments, 54 two-bedroom apartments, and 6 three-bedroom apartments at the property. Of the 97 units, 38 will be supported by project based housing vouchers and restricted to households earning at or below 30 percent of the Area Median Income (AMI), 31 apartments will be restricted to households earning at or below 60 percent of AMI, 13 apartments will be restricted to households earning at or below 80 percent of AMI and 15 units will be restricted to households earning at or below 100 percent of AMI. The AMI for Boston is $119,000 for a household of four.
The general contractor is Keith Construction and the architect is The Architectural Team. Schochet Companies affiliate, Federal Management Co., Inc. is the property manager.
MassHousing has financed 12 rental developments in the South End involving 1,868 units and $501.6 million in financing. The Agency has provided 8,497 home mortgage loans to Boston homebuyers and homeowners totaling $1.1 billion in financing.
About Fenway CDC
Fenway CDC works to preserve the Fenway neighborhood as a vibrant and diverse community by developing affordable housing, providing programs that enrich lives, and strengthening community voices. Fenway CDC serves more than 1,000 residents every year, including adults, children, youth, elders, people with physical disabilities, and formerly homeless veterans. More than 500 residents will continue to stay in homes that are affordable and receive housing-related services. More than 350 residents will access social services, job readiness training, employment, education programs, health workshops, financial education, Fair Foods, and Career Fair resources. Their civic engagement activities will educate more than 200 residents on leadership strategies to address social concerns to improve the quality of life for all community residents. For more information please visit www.fenwaycdc.org.
About the Schochet Companies
The Schochet Companies is a full service real estate development and management company founded by Jay R. Schochet more than forty years ago. Since that time the company has developed, owned, and/or managed more than 7,000 apartments, the bulk of which are affordable, and more than 600,000 square feet of retail and commercial space throughout New England and on the West Coast. Today, Schochet Companies owns and/or manages more than 5,000 apartments and 100,000 square feet of commercial space throughout New England. Headquartered in Braintree, the company employs more than 170 people. For more information about Schochet please visit www.schochet.com.
MassHousing (The Massachusetts Housing Finance Agency) is an independent, quasi-public agency created in 1966 and charged with providing financing for affordable housing in Massachusetts. The Agency raises capital by selling bonds and lends the proceeds to low- and moderate-income homebuyers and homeowners, and to developers who build or preserve affordable and/or mixed-income rental housing. MassHousing does not use taxpayer dollars to sustain its operations, although it administers some publicly funded programs on behalf of the Commonwealth. Since its inception, MassHousing has provided more than $25 billion for affordable housing. For more information, follow us on Twitter, Facebook and LinkedIn.