BOSTON (1/28/13)--The Federal Home Loan Bank of Boston announced Thursday it had awarded two credit unions, Coventry (R.I.) CU and Leominster (Mass.) CU, affordable housing grants to help the underserved in their communities.
Coventry CU, with $229 million in assets, received a $400,000 grant to help fund new construction of single-family homes targeting first-time homebuyers with incomes less than 80% of the area median income. It will provide homebuyers with financial planning services and homebuyer education. The homes will be designed to maximize energy-efficiency. Coventry CU will provide a construction loan and permanent financing to homebuyers.
"We applied on behalf of the Coventry Housing District--we are a partner--to fund affordable housing," David Root, president/CEO of Coventry CU, told News Now. "We're committed to $2 million in construction. It's a public policy issue for us. As homes are built, we come up with about two-thirds of the funding. The project is planned for 40 to 50 homes."
The project likely will take about three to four years, he added. Eleven people must apply for the loans before construction can begin on the homes, and so far three have applied, Root explained.
Leominster (Mass.) CU, with $620 million in assets, was awarded $30,000 to help in the rehabilitation of an 80-year-old home, using the traditional Habitat for Humanity model for a family earning less than 50% of area median income. The sponsor is providing 0% mortgage financing. Leominster CU will provide a construction line of credit and the town of Acton, Mass., will provide a grant.
"The credit union is committed to working with the communities we are in, and Habitat for Humanity is an excellent partner," John O'Brien, Leominster CU senior vice president of lending, told News Now. "This was good opportunity to work with them to help the community. We've worked with them on several projects over the years and are very happy to partner with them."
Credit union employees recently went out to work sites of two separate projects in which the credit union collaborated with Habitat for Humanity. "It was very rewarding and they got to meet the owners at the end of the visit," he added.
The Federal Home Loan Bank of Boston awarded $30.3 million to support 48 affordable housing initiatives in six New England states. Of this amount, $14.2 million was awarded as Affordable Housing Program (AHP) grants and subsidies, with the balance coming as subsidized advances or loans. The funds were awarded through member financial institutions to projects that will create or preserve 1,004 units of affordable rental and ownership housing for households earning at or below 80% of area median income.
AHP funds are used to help pay construction, acquisition, or rehabilitation costs. Member financial institutions work with local developers to apply for AHP funding, which is awarded through a competitive scoring process.