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Overview of different Housing Programs and Agencies, Part 1, MA Affordable Housing

Chapter 40B
Chapter 40B is a state statute, which enables local Zoning Boards of Appeals to approve affordable housing developments under flexible rules if at least 20-25% of the units have long-term affordability restrictions, which means that the rents or sales prices for the units are restricted by the 40B guidelines, and the households who live-in or buy the units have to have a household income under a certain threshold
40B regulations are put into place by DHCD (see below) and are applied by various monitoring agents we work with in different ways. The 40B guidelines are State guidelines, but they do defer in sections to the Federal/HUD Guidelines for certain definitions of income and assets Whileall the programs under this subcategory “follow” the 40B guidelines, there are significant differences between how each Program Administrator (DHCD, MassHousing and MHP) interpret the guidelines. The best thing to do, in any instance of confusion, is to ask the Processor or Processors most familiar with the program the questions that you have and write down the answers for future reference – the differences can be minor or major, simple or complex. There are also other programs or properties that work within the 40B guidelines that are not listed below, as they are low-volume properties or only come up rarely.

DHCD (Department of Housing and Community Development)

DHCD is the State agency responsible for developing 40B policy and regulations. DHCD also serves as the Affordability Monitoring Agent for all 40B projects approved under the Local Initiative Program as well as development built under Special Permits or Bylaws that are specific to a City/Town. DHCD periodically issues new or revised regulations that can impact Affordability Monitoring processes.
DHCD, as the group which wrote the 40B guidelines, has the most standard interpretation of the guidelines. Some of these guidelines were developed with assistance from SEB Housing (then SEB LLC), so DHCD programs are the most standard and normal version of the guidelines we work within.

MassHousing is an independent, quasi-public agency created in 1966 and charged with providing financing for affordable housing in Massachusetts. The Agency raises capital by selling bonds and lends the proceeds to low- and moderate-income homebuyers and homeowners, and to developers who build or preserve affordable and/or mixed-income rental housing. MassHousing does not use taxpayer dollars to sustain its operations, although it administers some publicly funded programs on behalf of the Commonwealth. Since its inception, MassHousing has provided more than $22 billion for affordable housing.
MassHousing is, in addition to DHCD properties, the largest source of 40B work currently at SEB Housing. Their program is identical to DHCD’s, with one key difference: Households are only allowed to reside in units that have as many bedrooms as household members – i.e. a 2-person household can reside in a 2BR, but not a 1-person household.

MassHousing is also the largest administrator of “Workforce Housing” programs that we work with. Workforce is a specific iteration of the MassHousing program that 1.) includes an AMI% minimum income, 2.) can sometimes permit home ownership, 3.) can have a prohibition on full-time students residing in the units, and 4.) can sometimes have vastly different documentation requirements for their program. Workforce projects are rare, and can either be very complicated or relatively simple, depending on how the program is enforced – as Workforce is much more rare, and does not necessarily follow the 40B guidelines, the rules are much more changeable based on what MassHousing feels is important about the project and the program in the moment and at completion of the regulatory agreement.
MHP (Massachusetts Housing Partnership)
A statewide public nonprofit affordable housing organization that works in concert with the Governor and the state Department of Housing and Community Development (DHCD) to help increase the supply of affordable housing in Massachusetts.
MHP (which is different than MassHousing OR MBHP, another monitoring agent that can come up in 40B homeownership) has a few key significant differences from DHCD 40B. 1.) Households made up entirely of full-time students (as defined as current or for 5 months of the last 12 months) cannot reside in MHP 40B housing unless they meet one of five possible exceptions, 2.) Households are allowed to own homes, 3.) Households must provide proof of ID upon application, 4.) many documentation requirements are different, including fewer bank statements. MHP also performs regular yearly audits of all of their properties, requires leasing offices and households to sign their TIC (Tenant Income Certifications – the MHP version of our eligibility assessment) and keep these papers on file with the leasing office, and for new lease ups requires submission of semi-monthly reports on the status of all unleased affordable units.