The Housing Stabilization Fund (HSF) is a state funded bond program that assists in the production and preservation of affordable housing for low-income families and individuals.
For-profit developers, non-profit developers, local housing authorities and municipalities in cooperation with for-profit or non-profit developers are eligible to apply for HSF funds.
Eligible Activities and Affordability Requirements
HSF monies may be used for the acquisition and/or rehabilitation of existing structures for sale to income-eligible first-time homebuyers, including distressed or failed properties, or the new construction of homeownership projects. Projects seeking HSF must have a minimum of 3 HSF-assisted ownership units, which must be secured with, at a minimum, a signed Purchase & Sale Agreement at the time of application.
All first-time homebuyers purchasing HSF-assisted units must earn no more than 80% of the area median income. Each HSF-assisted unit must have an appraised value that does not exceed 95% of the area's median price, as determined by the Single Family Mortgage Limits under Section 203(b). Any HSF-assisted rental unit in a multi-family property must be leased to households earning no more than 60% of the area median income. Those rental units may be leased at the "high" HOME rent or if the tenant receives a federal or state rental subsidy the maximum rent (i.e., tenant contribution plus rental subsidy) is the rent allowable under the federal or state rental subsidy program. (Please see the additional program information below for a list of the 203(b) mortgage limits, maximum rents and maximum household incomes for your community.)
DHCD will award the lesser of $750,000 per project and up to $50,000 per HSF-assisted unit in HOME entitlement/consortium communities. In non-entitlement or non-consortium communities, the maximum award is up to $65,000 per HSF-assisted unit. (Please see the additional program information below for a list of entitlement and consortium communities.
Projects located in HOME entitlement or consortium communities should include a matching commitment of local funds. If an application is submitted without matching funds, it will not be scored. In general, preference will be given to applications with full match commitments.
Loans to "Eligible Borrowers" will be for two years. By the maturity date, each unit must be sold to income-eligible first-time homebuyers. All HSF loans will be non-recourse and secured by a mortgage on the property. Upon sale of a unit in accordance with the terms of the loan and execution of a deed rider by an income-eligible first-time homebuyer, the principal amount due under the loan is reduced by the amount of HSF funds applicable to the unit.
The length of the Affordable Housing Restriction (a/k/a deed rider) for the homebuyer is 50 years. In the event that the homebuyer desires to sell the property prior to the end of 50 years, certain resale/recapture requirements will apply.
- strength of overall concept
- strength of development team
- demonstrated need for project in the target neighborhood
- clarity of affordability to the first-time homebuyer
- suitable site and design
- appropriate scope of rehabilitation or construction
- appropriate total development cost for properties included in proposal
- financial viability of the project
- degree of local support, including local funding commitments
- evidence of readiness to proceed
- evidence of satisfactory progress on projects previously funded with DHCD resources
- certification in accordance with Executive Order 418 (please click hear for information on Executive Order 418)
- incorporation of smart growth and sustainable development principals
How to Apply
DHCD makes HSF first-time homebuyer funding available through a "Notice of Funding Availability" (NOFA). Applicants must complete and submit the One Stop Housing Application. DHCD encourages project sponsors to contact the HSF staff to set up a meeting prior to application submission.
One Stop Application
Additional Program Information
DHCD Design Guidelines
HOME Entitlement and Consortium Communities
Housing Quality Standards (HQS)
State Lead Paint Rules
Mass Historic Project Notification Form
For additional information, please call the HOME/HSF staff at: (617) 573-1300.