Affordable Housing Projects Reaching Year 40 in Massachusetts

So far 19 affordable housing projects in Massachusetts have reached "Year 40", the maturity date for their HUD mortgages. The attached paper looks at what happened to these projects. Overall we found that 55% of the units were lost. However, while the vast majority of the non-Section 8 units were lost, most of the Section 8 units were preserved.

Replies to This Discussion

Permalink Reply by John V Fazio on January 5, 2011 at 3:56pm

Bill:

Thanks for the research article; I really enjoyed it. One question came to mind: Did some owners pre-pay the mortgages before maturation and access enhanced vouchers for eligible residents? It would be interesting to know how many tenants were protected from rent increases through vouchers. This would paint a more complete picture.

John Fazio

Permalink Reply by Bill Brauner on January 5, 2011 at 4:59pm

John,

Your question is a good one and I wish I had more complete information. What I do know is that sophisticated for profit owners have been taking advantage of prepaying their mortgages prior to maturity for the last several years. For the past year or so our local HUD office has been encouraging eligible projects to prepay. However, some projects were not eligible for enhanced vouchers and at least one owner this year was not willing or able to prepay the mortgage in time to qualify for enhanced vouchers for the tenants. It appears that at least 2/3 of the families in Year 40 units were protected with enhanced vouchers.