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Financing Products



ETODAF Acquisition

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Summary of Terms

Equitable Transit Oriented Development Accelerator Fund

Acquisition Loans and Acquisition/Predevelopment Loans

AMOUNT OF LOAN

$200,000 - $1,500,000

ELIGIBLE USES  

Acquisition gap financing, holding costs, and eligible predevelopment costs for TOD properties meeting the Fund’s TOD criteria.

Eligible projects include:

  • New or preservation affordable housing
  • Mixed income housing
  • Mixed use housing

AFFORDABILITY

At least 25% of the units must be affordable to households below 80% of AMI. Higher standards may apply in areas where gentrification is occurring.

 

Project must comply with the Mass Interagency Agreement Regarding Housing Opportunities for Families with Children (1/2014) and should include 10% 3 bedroom units unless specifically waived.

MAXIMUM LTV

When combined with Lead Lender loans, up to 100% of appraised value of the real estate and up to 120% of the value when including holding and predevelopment costs.

RATE

Non-profit borrowers: Fixed rate of 3.75%

For-profit borrowers: Fixed rate of 4.25%

TERM

2-3 years. Repayment is due at earlier of maturity or closing of construction financing.

GUARANTY/RECOURSE

ETODAF loans are recourse loans

SECURITY

Second priority mortgage on project real estate

FEES

1% of loan amount; 50% payable on acceptance of term sheet, remainder due at closing.

Lender Legal Fees to be paid by borrower but every effort will be made to streamline the closing process in coordination with Lead Lender.

 

 

ETODAF Predevelopment

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Summary of Terms

Equitable Transit Oriented Development Accelerator Fund

Predevelopment Only Loans

AMOUNT OF LOAN $200,000 - $500,000; for unsecured loans, the maximum amount may be lower. Funds will be disbursed as project progresses toward agreed upon benchmarks.
ELIGIBLE USES Mortgageable third party costs such as design, engineering, market and environmental studies, development consultants, financing fees, legal costs for TOD properties meeting the Fund’s TOD criteria.
AFFORDABITY At least 25% of the units must be affordable to households below 80% of AMI. Higher standards may apply in areas where gentrification may occur. Project must comply with the Mass Interagency Agreement Regarding Housing Opportunities for Families with Children (1/2014)and should include 10% 3 bedroom units unless specifically waived.
MAXIMUM LTV Lead Lender plus ETODAF loan may be up to 120% of LTV
RATE Boston, Cambridge, Somerville, Watertown: 4.125%  Other areas: 5% For profit borrowers add .5%; Rates subject to change; call for latest information.
TERM 2-3 years. Repayment is due at earlier of maturity or closing of construction financing.
GUARANTY/RECOURSE ETODAF loans are recourse loans
SECURITY Second priority mortgage on project real estate; for public sites, guarantees or alternative support and security arrangements with the municipality will be required.
FEES

1% of loan amount; 50% payable on acceptance of term sheet, remainder due at closing. Lender Legal Fees to be paid by borrower but every effort will be made to streamline the closing process in coordination with Lead Lender.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For more information, contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it at  (617) 410-4334.

 

Equitable Transit-Oriented Development Accelerator Fund

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Fund Objectives
The Equitable Transit-Oriented Development Accelerator Fund (ETODAF) was created by Boston LISC, The Boston Foundation, and the Hyams Foundation to provide developers with streamlined access to acquisition and predevelopment capital that can be used to acquire and advance strategic properties along transit corridors. Definition of "Equitable Transit-Oriented Development"
 
The Fund encourages development and preservation of equitable, mixed-use, affordable housing that will revitalize and preserve neighborhoods. Smart transit oriented development (TOD) will reduce low and moderate income households’ combined housing- plus-transit costs, lower car use and create and increase ridership for existing and expanding transit lines. 
 
The Accelerator Fund’s objective is to preserve, encourage and reinforce a pattern of smart growth and equity in TOD housing development in Greater Boston and Massachusetts.
 
How the Fund Works
The Fund utilizes the existing Massachusetts network of affordable housing lenders (Lead Lenders) in partnership with public and philanthropic lenders to advance equitable TOD projects by providing acquisition and predevelopment funding. The Fund’s Lead Lenders originate the loans, using their own loan capital. The Fund provides funding, in the form of subordinate loans, above the amount of the typical Lead Lender loan to cover the loan-to-value (LTV) gap, predevelopment expenses and holding costs. 
 
The Accelerator Fund consists of $3.5M in Program Related Investment (PRI) capital from foundations and $1M in top loss from the Commonwealth of Massachusetts. Together with the Lead Lender capital, the Fund will provide over $25M in loans for TOD projects. 
 
The Accelerator Fund invests in projects based on alignment with its equitable TOD mission, and the impact and feasibility of the project. Boston LISC will be the Fund Manager and will coordinate with Lead Lenders to make project specific investments. For predevelopment only loans, LISC will be the Lead Lender. 
 
Lead lenders originate the loans and underwrite them in accordance with Accelerator Fund criteria and their own underwriting standards. In order to streamline the process, the underwriting of the Lead Lender and the Fund is coordinated. Documents are standardized and designed to make the transaction as coordinated and simplified as possible. The borrower will experience one closing and The Fund will buy a participation from the Lead Lender. The Lead lender will service the loans.
 
Project underwriting will assess:
  • Impact of the project on the goals of equity, affordability, transit proximity and neighborhood transformation
  • Capacity of the borrower and security of the loan 
  • Timing and adequacy of take-out sources of funding including funding for holding costs
  • Value and appraisal standards
  • Readiness to proceed and a strong case for strategic land acquisition
 
The summary Term Sheets detail requirements for Acquisition/Predevelopment Loans and for Predevelopment Only loans.
 
Interested applicants should contact  This e-mail address is being protected from spambots. You need JavaScript enabled to view it  at  (617) 410-4334.
 

Definition of Equitable Transit-Oriented Development

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For the purposes of the Equitable Transit-Oriented Development Accelerator Fund, ETOD is defined as follows:

 

Within City of Boston:

The Fund will support projects that are within 0.25 miles of commuter rail stations, subway stations, and Bus Rapid Transit (BRT) stops.

Outside City of Boston/Rest of Massachusetts:

The Fund will support projects that are within 0.5 miles of commuter rail stations, subway stations, ferry terminals, Bus Rapid Transit (BRT) stops, Regional Transportation Authority (RTA) intermodal station, or bus stations on key transit routes.

For all project locations:

All projects, and particularly those greater than 0.25 miles from commuter rail and subway stations need to demonstrate clearly how they are connected and oriented to transit.

All projects need to be consistent with the Commonwealth's Sustainable Development Principles[1], particularly those outlined in the Additional Criteria below.

Additional Criteria:

Projects near commuter rail stations need to be in a location with services and amenities (retail or commercial, such as supermarkets and convenience stores, or municipal buildings or services), or have connections via close transit (i.e. buses, circulator buses) to town centers, services or amenities.

·        All projects need to demonstrate "connectivity to transit." In addition, the Fund in underwriting loans will seek to support projects that are intentional in their transit-accessible location and plan to utilize the location to encourage transit use. Potential borrowers will need to describe plans for a pedestrian and bike friendly environment, connectivity to adjacent services and the overall neighborhood, and how the project connects to transit, which will be evaluated by the Fund Manager.

·        Parking and Density. Because parking and density requirements vary from municipality to municipality, it is hard to provide a specific numeric goal or requirement. However, ideal TOD projects will provide less parking than non-TOD projects, and will have density higher than the surrounding neighborhood context. All projects must have a density of at least 8 units/acre for multifamily housing developments and are anticipated to have a significantly higher density, Applicants will be asked to project parking to be provided, and project density (in dwelling units/acre) of the proposed development compared to the density of the surrounding neighborhood.

·        Smart growth features and green design. Project applicants will need to describe their plans for green and sustainable design and construction (including bike storage, Zipcar parking, etc.) and other ways their projects demonstrate consistency with the Commonwealth’s policies regarding greenhouse gas reduction through the Global Warming Solutions Act and Green DOT initiative.



[1] Massachusetts Sustainable Development Principles: http://www.mass.govienvir/smart_growth_toolkit/pdf/patrick­prineiples,pclf

 

LISC invests in preservation of affordable housing

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In the past year, Boston LISC has invested over $5 million in development of affordable and mixed income housing and commercial development in greater Boston neighborhoods.  Recent projects supported include two preservation projects: Allston Brighton Community Development Corporation’s Commonwealth and Glenville Apartments, a 235 unit affordable development in the heart of Allston, and Salem Point Apartments, North Shore CDC’s 77 unit affordable family development in the Point neighborhood of Salem. LISC is providing a $500,000 predevelopment loan to Allston Brighton CDC and a $637,000 predevelopment loan to North Shore CDC. North Shore CDC expects to begin construction on Salem Point this summer, and Allston Brighton CDC anticipates beginning construction later in 2014.  LISC had also made a recoverable grant to the Salem Point project to assist in integrating energy efficiency upgrades into the rehabilitation scope. 

 
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