State to hire a housing consultant
North Middlesex Bank is "in the process of finalizing a forbearance agreement" that has already halted foreclosure auctions that had been scheduled for December at two affordable rental properties: Great Elms on Stow Road, and The Inn on Fairbank Street. Meanwhile, the state is getting involved, contributing funds to hire an affordable housing consultant.
Steve Sugar, vice president of commercial lending at the bank, said on Monday that the agreement between the bank, Harvard's Municipal Affordable Housing Trust, and the property owner, Harvard Trust Non-Profit Properties, "could be signed within the next couple of days." Sugar noted that the bank would not release details of the agreement without permission from the affordable housing trust and the owners.
This week, both the Selectmen's liaison to the affordable housing trust, Ron Ricci, and the president of Harvard Trust Non-Profit Properties, Victor Normand, declined to comment. Normand referred future requests for information to Ricci.
However, others involved in negotiating the agreement said foreclosure auctions for one or both properties would ideally be delayed until spring due to the affordable housing trust's commitment of $11,600. The vote to contribute that money to Great Elms and The Inn was discussed and taken in closed session in early December and later announced by Ricci, who this week would not say whether the money would be used to pay the mortgage until spring.
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| Great Elms on Stow Road. (Photo by Lisa Aciukewicz) |
Sugar would not confirm the auction schedule, but said auction delays were related to the commitment of money and to the welfare of the residents.
"The first priority of all parties concerned are the tenants and their well-being," he said.
The state Department of Housing and Community Development has offered money to help Harvard's affordable housing trust salvage the nine rental units that will be lost if the properties fall to foreclosure. The units are the only state-certified affordable rentals that are not restricted to those over 55.
"DHCD is demonstrating its commitment to saving affordable housing in Harvard by working with MassHousing Partnership to hire an affordable housing consultant. The [Harvard] Municipal Affordable Housing Trust must approve the consultant," wrote agency spokesman Mary-Leah Assad in a statement to the Press this week.
The consultant, according to agency officials, would "look at all options, including replicating the units on another property."
The affordable housing trust had in August committed its own money, $10,000, to hire a consultant, but was unable to engage one in the time allotted by the bank. The trust never spent any money on the consultant.
If the bank eventually forecloses on the properties, the state must repay $325,861 to the federal HOME program, which had provided a loan for Great Elms and The Inn in 1993. Such loans are payable only when units fall from affordability, as they would at foreclosure. New owners at Great Elms and The Inn would not be responsible for the HOME loan, state housing officials said this week.
Also this week, Department of Housing officials confirmed that they are encouraging Harvard to replicate the units on other properties in town if Great Elms and The Inn cannot be preserved as HOME program units. The state could, in that case, request a waiver from paying back the full HOME loan. Affordable family rentals are a "significant need" in Harvard, agency officials said. Should the nine units be lost, it would represent the first such failure of a HOME project in the state.
The state has "over 6,000 rental units in the HOME program," said agency officials.
The state Department of Housing also confirmed that Harvard residents Bonnie Heudorfer, a housing consultant and faculty member at Northeastern University, and Rhonda Sprague, a real estate broker and the property manager at The Inn, were participating in meetings and conference calls to solve the problems at Great Elms and The Inn. The idea of bringing a "local developer" into the problem-solving process, as proposed by Ricci at an early December selectmen's meeting, was discouraged by agency officials, who told the Press this week that DHCD recommended against "including local developers in the discussions at this time."
The crisis at Great Elms and The Inn began last April when the non-profit group that had owned the properties for more than 25 years stopped paying its mortgage after years of running without reserve funds. It faced capital repair bills that amounted to either a total of $192,000 for a five-year program of modest repairs or $1.8 million for full-scale renovation. The estimates were created by a state-funded housing consultant in 2009 and 2010.