Last Thursday’s meeting of the board of Affordable Housing Trust Fund revealed that the net cost to the AHTF for the purchase and resale of two condo units at the 133 Salem St. condo development project in order to create two units of affordable housing in the city will be $520,000.
Last fall, the AHTF contributed $100,000 to a state program that unlocked funds resulting in 18 units at 133 Salem St. becoming designated as affordable housing. Thanks to the AHTF’s $100,000 contribution, together with the state funds, the 18 units will be sold at well-below market rates to eligible buyers through a lottery process (to be administered by an independent firm used by the state), thereby increasing the number of much-needed affordable housing units in the city. Those units will be deed-restricted, which essentially means that the buyers cannot rent them and if they resell them in the future, they must do so at the then-existing price for affordable housing.
Then in March, the brokers for the project came before the AHTF with the suggestion that the board purchase two additional units at full market prices and then resell the units at the subsidized rates through the same lottery process.
AHTF Treasurer Anayo Osueke noted at Thursday’s meeting that the $520,000 represents more than 40% of the AHTF’s total available funds in its bank account. It also far exceeds the $366,597 that was allocated to the AHTF by the City Council for this year.
The two units purchased by the AHTF will bring to 20 the total number of subsidized units at the 133 Salem St. project, which consists of 72 units in total. Of those 20 units, 12 will be designated for qualifying Revere residents and two for qualifying veterans. The other six will be available to all Mass. residents.
According to the website for the property, “The condos are designated under the following Greater Boston Average Medium Income Restrictions (AMI): Six (6) Condos at the 70% AMI level and fourteen (14) Condos at the 80% AMI level.
“Restricted Community Wealth Builder Housing Units must be sold to first time homebuyers as defined: First-time homebuyer means an individual or household, of which no household member has had an ownership interest in a principal residence at any time during the three (3)-year period prior to the date of qualification as an eligible purchaser, unless such ownership was by (i) any individual who is a displaced homemaker (as may be defined by the Massachusetts Executive Office of Housing and Livable Communities) (ii) any individual who is a single-parent who has only owned a house with a former spouse while married or (iii) any individual who has owned a dwelling unit whose structure is not permanently affixed to a permanent foundation in accordance with local or other applicable regulations or is not in compliance with applicable building codes, or other applicable codes, and cannot be brought into compliance with the codes for less than the cost of constructing a permanent structure.
“At the time eligibility is determined, homebuyers must have assets, excluding qualified retirement plans, of less than $100,000.
Additionally, homebuyers must (1) qualify for a FHA, VA or Fannie Mae or Freddie Mac-conforming fixed-rate mortgage loan, (2) provide a minimum 3% down payment or qualify for an approved Down Payment Assistance program, (3) pay closing costs, and (4) complete homeownership counseling by the time of purchase.”
A full breakdown of the $520,000 expenditure was not provided at the meeting, though Osueke touched briefly on the issue at the start of the main discussion on the AHTF’s agenda. “This (transaction) is quite complicated,” said Osueke. “That’s why I wanted to have a separate talk because there are transactions that are happening simultaneously.”
However, after the board returned to the main topic of the evening and concluded that discussion, the meeting adjourned without revisiting the matter. The board is holding another meeting this evening (Thursday) when Osueke presumably will provide the details of the transaction, such as the price paid by the AHTF for each unit, the resale price (including commissions), and the size of the units (i.e., 1-bedroom, 2-bedrooms, etc.) that the AHTF is subsidizing. In addition, it is unclear whether the two units being purchased and resold by the AHTF will be available to Revere residents only, or whether they will go into the lottery of units available to non-residents.
