Over the past 11 years, CDCs across the Commonwealth have provided critical training and educational services to future homebuyers.  Pre-purchase education for prospective homebuyers is a vital resource that helps people not only prepare to purchase a home, but also helps qualify them for the One Mortgage, formally Soft Second Loan, program.

Check out the table below to see the number of individuals who not only graduated from a pre-purchase homebuyer course offered by a CDC, but also used the One Mortgage or Soft Second program to buy their home. (Source: MHP)

Last week, Governor Baker and Housing and Economic Development Secretary Jay Ash unveiled the first round of Urban Agenda Grant winners at a series of meetings in Boston and Framingham. The inaugural awards from this new program – a total of $3 million awarded to fund 16 separate economic development, planning and housing initiatives from New Bedford to North Adams – will entrust municipal officials and community organizations to forge collaborative partnerships and craft unique, specific solutions to meet locally-identified needs that satisfy a range of economic development and housing opportunities.

MACDC is proud to have several member organizations lead and partner in 7 of the 16 program initiatives that received more than half ($ 1.6 million) of the grant funds in this first round. All told, the grant program made awards in three categories of community development: economic development implementation, economic development planning, and housing development. State agency officials received 54 applications, requesting a total of $12.7 million in funding, from communities across the Commonealth. With this level of interest, a successful program launch can build greater support to fund successful community-driven projects through Urban Agenda grants in the years to come.

Complete list of grant award winners and project briefs

Nonprofits on a budget sometimes struggle about how and when to hire an attorney.  Getting legal help can be intimidating and expensive so being strategic about bringing a lawyer on board makes good sense.  Here are some tips to consider before making the call.

When do you need a lawyer?

 “An ounce of prevention is worth a pound of cure.”  Community development corporations sometimes believe that lawyers are only needed for closings and lawsuits.  However, there are many situations when some good legal advice at the outset of a difficult situation can save the agency time and money in the long run.  If a nonprofit is entering into a significant contract or has a tricky employment decision to make, up front legal review can save a lot of headaches later on.  On the other hand, there are many situations where the nonprofit can take on tasks that were formerly left to the lawyers—these include incorporating an entity with the secretary of state and annual corporate filings.  The bottom line is this:  if the stakes are high, or the issues are murky or unusual, think about reaching out for some support.  A lawyer may be able to offer helpful advice at the right time.

The right person for the work.

It is critically important that the lawyer you hire has the relevant experience to assist your organization.  This is especially true for public housing authorities and other public and quasi-public entities regulated by HUD or DHCD. Hiring a lawyer who is not familiar with procurement rules or open meeting law can be a recipe for trouble. Finding a lawyer with relevant experience can be handled through networking with other agencies and advocacy organizations. CHAPA also has a consultant page that identifies lawyers with relevant experience.  http://www.chapa.org/consultant_browse

Talking about fees.

Any lawyer you hire should be willing to discuss fees openly and you should not feel uncomfortable asking about how much the services may cost.  There are some situations where it may be difficult or impossible for the lawyer to provide a reliable estimate of how much the services required will cost. Complex litigation with a self-represented individual falls into this category. However, there are other engagements where it is reasonable to ask the attorney to provide at least a range of the expected cost.  If you are retaining a lawyer for a closing, ask if the lawyer will provide a “not to exceed” price for the services. A lawyer’s tasks are similar from one closing to another and lenders typically pay their attorneys on a fixed fee basis.  Therefore, you may want to ask whether the attorney would be willing to give you a fixed price for the transaction. Doing so provides both your organization and the lawyer some certainty. Other situations that lend themselves to a fixed fee may include contract review and preparation of simple contracts and releases.

Title insurance (for extra credit!)

Massachusetts is a “negotiated rate” state for title insurance policies over a certain amount. If your attorney is issuing a title insurance policy on a housing project under development and the acquisition price or loan amount is greater than $2 million, you should ask him or her to negotiate with the title insurance company the rate you will pay for your policy premium. For owner coverage (as contrasted with coverage for the lender), the savings can be significant.  While a standard rate may be $3.65/$1000 of coverage for smaller policies, some title insurance companies are willing to reduce the premium on a large policy for a nonprofit to as little as $1.25. On a $5 million policy with coverage for your agency as the owner, that is a savings of $12,000.

Your relationship with your attorney is a key ingredient to the success of your organization. Call when you need to and seek out an experienced lawyer who will work with you to keep your legal expenses in check while advancing the mission of your organization.

Felicity Hardee is an attorney who helps nonprofits and affordable housing developers with their community development needs. She assists clients with closings involving multiple financing sources, including Low Income Housing Tax Credits, and provides compliance assistance, litigation services and general legal advice to CDCs throughout Massachusetts. Find her at www.fhardee.com, on LinkedIn and on Twitter at @felicity_hardee.

The foreclosure crisis has receded from the headlines.  But any notion that foreclosure is not a serious problem anymore would be news to nonprofit foreclosure prevention counselors on the front lines.

At a gathering on September 28, convened by MACDC and CHAPA, counselors from 13 nonprofit organizations immersed in foreclosure prevention spoke about the issues they encounter, the changing nature of the foreclosure crisis, and challenges going forward.  They spoke about lenders being aggressive in setting auction dates yet unresponsive to borrower requests for loan modifications. They noted that the funding that has sustained foreclosure prevention counseling is drying up.  They fear the impact on their neighborhoods of lenders initiating foreclosure while neglecting to maintain those properties once the foreclosure process has been initiated.

The data on foreclosures underscore the persistent nature of the problem.  A September article by The Warren Group, publishers of Banker & Tradesman, noted that foreclosure petitions in the Bay State rose in July, increasing 49 percent compared with July 2014.  This marked the 17th consecutive month of increases in petition filings. In the first seven months of the year, there were 6,360 petitions filed in Massachusetts, a 60 percent increase from last year's mark through July. Petitions are the first step in the foreclosure process, when banks petition the state courts for the right to foreclose.

Too often, loan servicers are taking steps that tend to exacerbate problems rather than remedy them.  Some are not complying with required standards when borrowers apply for loan modifications.  Many are reluctant to negotiate forgiveness of past due amounts, or to consider principal reductions, when borrowers encounter hardships.  Some are ignoring borrower authorizations of foreclosure counselors to negotiate on their behalf.

Counseling agencies are struggling to serve their clients with diminishing resources to fund their work.  Many continue to rely on annual grants from the MA Division of Banks through a program, authorized by legislation from 2007 that permits the Division to collect fees from licensed mortgage originators, retain up to $5 million of these fees, and use up to $2 million of the retained revenue to make grants for foreclosure prevention counseling and homebuyer education.  Earlier this year, through the State budget, the Legislature authorized the Division to retain $2.35 million from these fees, and the Division in 2015 made $1.3 million available in grants. The Request for Proposals for 2016 grants has recently been issued by the Division.

MACDC advocated for this program because we knew that a long-term, stable source of dedicated revenue would be necessary to address the foreclosure crisis.  Eight years later, with the number of foreclosures stubbornly high, the wisdom of the Legislature’s decision is evident. According to a 2015 report issued by the Division of Banks, in calendar year 2014, the 21 agencies who received awards served almost 5,300 clients.  Unfortunately, other funds that have historically supported this work have been reduced or eliminated, including funds from the Community Based Home Corps Program (funded by the MA Attorney General’s Office from prior legal settlements), HUD Counseling grants, and NeighborWorks America’s National Foreclosure Mitigation Counseling (NFMC) Program.

An article by journalist Loren Berlin, published in the November 10 issue of Shelterforce Weekly, addressed the dearth of funding nationwide for foreclosure prevention counseling. She notes, “Across the United States, hundreds of housing counseling agencies are struggling to regroup as elected officials declare the foreclosure crisis resolved and public funds to support mortgage default counseling services evaporate. The NFMC received $180 million in Congressional appropriations in 2007; it got roughly $50 million this year. Similarly, the U.S. Department of Housing and Urban Development’s budget for housing counseling services, which funds a variety of counseling services, including foreclosure prevention,  was just $47 million this year, down from $87.5 million in 2010. Additionally, many states have reduced or ended their support for default counseling, and the majority of funds from the 2012 national mortgage settlement have been depleted. This loss of government support is compounded by a similar decrease in funds from national foundations and large financial institutions.”

In Massachusetts, MACDC is working with CHAPA to identify and advocate for resources to fill this growing void. At the same time, we need to continue to support the work of the nonprofit counseling agencies involved in homebuyer education and financial literacy, so we don’t see a repeat cycle of foreclosures in the future.

Research has demonstrated the link between pre-purchase homebuyer education and more sustainable homeownership.  An analysis commissioned by the Federal Reserve Bank of Philadelphia in 2014 affirmed the benefits of pre-purchase counseling: in addition to improving homebuyers’ financial creditworthiness as they prepared to qualify for a home mortgage, individuals who received one-on-one counseling achieved better outcomes after purchase in terms of credit score, total debt, and payment delinquency than those who did not receive such counseling.

A working paper commissioned by national mortgage lender Freddie Mac in 2013 concluded that pre-purchase homeownership counseling reduced 90-day delinquency rates by 29% for first-time homebuyers taking out fixed-rate loans in owner-occupied one-unit properties under Freddie Mac’s affordable lending programs.

MACDC believes the path forward is clear.  The Massachusetts state legislature can take a major step forward by providing funding for foreclosure prevention counseling and for first-time homebuyer education to replace what has been lost; one way would be authorize the MA Division of Banks to retain a higher amount of revenue from licensing fees so the Division can increase its awards.  With this one step, we can help homeowners stay in their homes, protect neighborhoods from the negative impacts of foreclosure, and help today’s homebuyers to become tomorrow’s successful homeowners.

In 2015, the Massachusetts Housing Investment Corporation (MHIC) reached a new high in supporting community- and neighborhood-based organizations by donating over $400,000 to 31 CDCs, Boston LISC and MACDC with two-year contributions.  This level of support was only made possible by MHIC’s commitment to use the Community Investment Tax Credit (CITC).  MHIC, as a nonprofit investment and lending organization that focuses on the critical shortage of affordable housing across the Commonwealth, has financially supported CDCs since its founding in 1990.  Now, through the CITC program, MHIC is also able to help CDCs grow their operations through this valuable financial tool.

“The Community Investment Tax Credit enables MHIC to provide further support to our partners on the ground in communities of greatest need across Massachusetts,” commented Joe Flatley, MHIC’s President and CEO.  “We’re thrilled to be a leading investor in CDCs through the CITC program in 2015.  It’s an additional resource for us to use that ensures CDCs continue to provide critical services in the neighborhoods and towns in which they work.  We strongly encourage more businesses, individuals, and foundations to use the CITC program to power their donations to CDCs.”

“MHIC’s support of our field has been phenomenal from the start.  It doesn’t surprise me that Joe and the team at MHIC would use the CITC program to further support what CDCs are doing. This is an organization that knows how to invest wisely and help revitalize our most distressed communities.  And that’s what the CITC program is all about,” concluded Joe Kriesberg, MACDC’s President.

The CITC program continues again in 2016 with an additional $6 million of credits to be allocated by the Commonwealth’s Department of Housing and Community Development.  To learn more about the program, go to https://macdc.org/how-it-works.

Leroy and Janice Cumberbatch are no strangers to hard work.  The husband and wife team own and operate International Construction and Development (ICD), a local MBE general contracting firm hired to work on the interior construction of Madison Park Village III.

Leroy Cumberbatch began working in carpentry as a  high school student in his native country of Barbados.  After moving to the United States in 1988 and becoming an electrical tradesman, he launched ICD as a general contractor in 1994.  Janice manages the bookkeeping and cashflow for ICD, and as Leroy proudly boasts, "Janice helps out a lot, and often is even willing to strap a toolbelt on and work alongside me to get the job done."

The interior construction of Madison Park Village III is ICD's largest project to date, and one that Leroy is hopeful will lead to more substantial opportunities for his minority-owned business.  MPDC has also hired ICD on past jobs, including Dudley Greenville apartments, and plans to work with the firm again on future projects.

Keeping the business in the family is important to Leroy and Janice who are optimistic that their daughter will assume more responsiblity at ICD once she completes her degree in computer engineering at Wentworth Institute of Technology.

It has been a pleasure working with ICD, and we wish them an abundance of success in the future.

Click here to learn more about our commitment to hiring minority-owned and women-owned businesses.

Photo by Madison Park Development Corporation

Check out this great video highlighting the value and impact JPNDC's Family Prosperity Initiative.  This is a great program with powerful results in the community.

CDCs, in general, are best known for the affordable housing projects they build in their communities. JPNDC and it's fellow CDCs across the Commonwealth are helping families save money, buy homes, start businesses and much, much more. Check out how MACDC highlights the broad spectrum of services CDC offer residents within their community.

On Friday, December 11, Dorchester Bay EDC announced the hiring of Perry Newman as their new CEO.  MACDC welcome Perry to the CDC community here in Massachusetts.

Below is an excerpt from the press release:

"The Board of Directors of Dorchester Bay Economic Development Corporation is pleased to announce our hiring of a new CEO, Perry B. Newman. Over the course of a career in business, law, government and non-profit leadership Mr. Newman has created economic opportunity, advanced understanding of public policy, and brought clients and stakeholders together. He represented clients in the public, private and non-profit sectors in efforts to achieve objectives in diverse cultural environments, and also brings to Dorchester Bay extensive experience as a consultant, speaker, and author on matters relating to economic development, international business, and politics."  READ MORE

On Monday, November 16th, Governor Baker was the keynote speaker at a breakfast championing the lasting impact of CDCs and the Community Investment Tax Credit. With over 120 leaders from the business, investment and philanthropic community, Governor Baker highlighted how important CDCs are to the communities in which they work, how he's appointed to CDC Executive Directors to his administration and how he supports the Community Investment Tax Credit.

Check out the video to learn more.

Developers seeking to build mixed-use projects in transit-oriented communities now have a new financing tool available. That tool – the Healthy Neighborhoods Equity Fund (HNEF) – was expressly designed to fill the equity gap for real estate projects in transitional neighborhoods where developers want to build new residential and commercial properties, but where the market may not yet be strong enough to support conventional financing.

HNEF funds projects that can be expected to achieve community, environmental and health impacts. The Fund was created by the Massachusetts Housing Investment Corporation (MHIC) and the Conservation Law Foundation (CLF) for two major reasons:

1. There is great public concern about and a growing body of tangible evidence that the built environment greatly affects health and health care costs. It’s well documented that diabetes and heart disease, for example, are twice as prevalent among poor adults as among upper-middle-class Americans. Since 1990, the number of Massachusetts residents living in neighborhoods with concentrated poverty has increased by nearly one third, and here in Boston life expectancy varied by as much as 33 years between census tracts located just two miles apart.

2.  Many developers who are interested in building mixed-income, mixed-use projects in TOD neighborhoods are hampered by a lack of patient, lower-cost capital. While public support for this type of development is generally strong, needed subsidies are limited and highly competitive, and most nonprofit developers don’t have sufficient equity to self-fund larger projects. Meanwhile, private developers often view these locations as too risky.

To address these issues, MHIC and CLF created an equity source to help fill the funding gap, improve the built environment in targeted neighborhoods, and provide reasonable, risk-adjusted returns for investors. Among other things, what distinguishes HNEF is its unique and groundbreaking approach to measuring and monitoring local health impacts, developed with major input and funding from HNEF’s research and public partners including the Robert Wood Johnson Foundation, the Kresge Foundation, the Harvard School of Public Health, the Metropolitan Area Planning Council, and the Massachusetts Department of Health.

To be considered for an HNEF investment, projects must be within one-half a mile of a transit node, or in a mixed-used neighborhood with significant potential for increased walkability and demonstrated public and community support. HNEF can finance mixed-use office, retail, and moderate- and market-rate housing.

HNEF investments will be made at construction loan closing and are expected to stay in the project for up to 10 years. Typically, they will provide 5-25% of TDC (with a maximum of $5 million) and up to 90% of equity in a project.

We are fortunate that here in Massachusetts, we have many “gateway cities,” and other communities with reliable transit service. But to take better advantage of the potential access to jobs, health care, recreation and other benefits that transit can provide, there is a clear need for more and better-integrated development – development that stresses the environmental, health, and community impacts – in those areas.

To that end, the HNEF team is actively building a pipeline of high impact projects in Massachusetts, with many in greater Boston, and others in downtown areas and around commuter rail stops in smaller cities. Developers interested in additional information, or who would like to see if a project may qualify for HNEF consideration, should visit http://www.hnefund.org or contact MHIC at 617-850-1000.