What is MassHousing BILD?
MassHousing BILD (Bringing Innovation to Lending and Development) creates financing solutions for market-oriented, mixed-income rental housing construction to catalyze private capital investment.
Through BILD, MassHousing will provide a one-stop financial solution by offering a competitive senior debt product coupled with innovative equity financing. Rental developers are eligible to apply if their developments are new production, with at least 50 total units, where at least 20% of the units are affordable to residents earning up to 80% of AMI. Both the FORGE Loan and Momentum Equity are considered eligible subsidized financing sources under Chapter 40B.
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Momentum Equity
The Momentum Equity is an efficient and predictable source of stable equity financing. While not a subsidy or a grant, it is designed to be flexible compared with other equity available in the commercial market.
Momentum Equity is designed to blend with private equity and revolve to enable MassHousing to continue making investments in housing over time.
The Momentum Equity is an efficient and predictable source of stable equity financing. While not a subsidy or a grant, it is designed to be flexible compared with other equity available in the commercial market.
Momentum Equity is designed to blend with private equity and revolve to enable MassHousing to continue making investments in housing over time.
Momentum Fund Features
- MassHousing can finance 25% of total equity for a development through Momentum Equity to blend with private equity, resulting in an overall lower cost of equity.
- The average Momentum Equity investment will be for 7 to 10 years, or up to 15 years coterminous with the subordinate loan.
- Funding enters at construction completion as takeout financing
- Momentum Equity will be considered an eligible subsidized financing source under Chapter 40B.
Eligibility Requirements
- Developments that produce net new units (new construction or adaptive re-use) and has at least 50 total units (with a preference for larger developments).
- Developments that are permitted and ready to close will be given priority.
- Developments must have minimum affordability levels of 20% of units restricted to 80% of AMI.
FORGE Loan
The FORGE Loan is a new MassHousing rental taxable lending product offered in collaboration with Freddie Mac. For each FORGE Loan, MassHousing provides 10% of the debt as a subordinate loan in a first loan loss position. This enables the borrower to access Freddie Mac's most favorable taxable terms, including loan pricing, leverage, and forward rate-lock periods.
The FORGE Loan may be utilized either as a standalone financing solution, or in combination with MassHousing's Momentum Equity investment.
FORGE Loan Features
- 36-month forward commitment, at a fixed rate
- The FORGE Loan has up to a 15-year loan term, with a 40-year amortization schedule
- Up to 80% LTV, with 1.25x DSCR
- The FORGE Loan will be considered an eligible subsidized financing source under Chapter 40B.
Eligibility Requirements
- Developments that have at least 50 total units (with a preference for larger developments).
- Developments that are permitted and ready to close will be given priority.
- Developments must have minimum affordability levels of 20% of units, restricted to 80% of AMI.
BILD with Chapter 40B
Both the FORGE Loan and Momentum Equity are eligible subsidized financing sources under Chapter 40B
MassHousing's BILD Strategies represents a statewide toolbox for accelerating mixed-income housing growth. Mixed-income developments may be permitted and constructed under either local inclusionary zoning ordinances or Chapter 40B. Financing programs under BILD Strategies will lower development costs for projects in and around the Boston core, constructing new affordable homes under strong local inclusionary zoning policies. Outside the Boston core, where Chapter 40B remains a key engine of mixed-income housing growth, BILD Strategies will create new competitively-priced financing options for 40B developers.