Property that is no longer being maintained by its owners and is either vacant or not lawfully occupied. Some jurisdictions limit the term to properties that have gone through a legal proceeding confirming their failure to pay back property taxes.
A small, self-contained residential unit built on the same lot as an existing single-family home. (Because they are often used by extended family members, ADUs are also referred to as "in-law apartments" or "granny flats.") ADUs may be built within a primary residence (such as in an attic or basement), attached to the primary residence (like a small duplex unit with a separate entrance), or detached from the primary residence (such as conversion of a detached garage). An ADU will be subordinate in size, location, and function to the primary residential unit (which is why ADUs are sometimes referred to as "secondary units" or "second units").
Click here to learn how communities are using ADUs to expand the supply of affordable homes.
A new use for a structure or landscape other than the historic use, normally entailing some modification of the structure or landscape.
A mortgage loan subject to changes in interest rates during the course of the loan term. When rates change, adjustable-rate mortgage (ARM) monthly payments increase or decrease at intervals determined by the lender. The change in monthly-payment amount, however, is usually subject to a cap. In hybrid ARMs, the interest rate is fixed for a period of time – often, 3, 5, 7, or 10 years – and then coverts to an adjustable rate thereafter.
Adult foster care is a type of supportive housing for older adults and people with disabilities who need assistance with everyday activities in order to live independently. An adult foster care home is typically the primary residence of the person providing the care, and most accommodate from one to six residents. Adult foster care homes provide a homelike environment for their residents and are also commonly referred to as adult family homes, family care homes, homes plus, and supportive care homes.
An affordability covenant is a legally binding clause to a deed that specifies that the property will remain affordable by setting certain terms and conditions related to its long-term use. An affordability covenant may restrict to whom a rental unit is rented and at what level or to whom and at what price a for-sale unit will be sold. These guidelines are typically put in place to preserve the affordability of homes financed with substantial government subsidies for future residents.
Click here to learn how affordability covenants can be used to preserve the affordability of for-sale homes.
A subjective term. There is no single definition of affordable housing. As used in this guide, housing available to a household earning no more than 80% of the area median income at a cost that is no more than 30% of total household income. The Getting Started section reviews various approaches to defining affordable housing. Click here to go to the Getting started Q&A on this topic.
Affordable Housing Program (AHP)
An affordable housing program run by the Federal Home Loan Bank (FHLB) system, AHP provides grants and subsidized interest rates on advances to its member institutions for low and moderate-income housing.
Affordable Housing Trust Fund(s)
See “Housing Trust Funds” and “Massachusetts Affordable Housing Trust Fund” below.
Age in place is a term that refers to aging independently while living in one's current residence for as long as possible. The ability to age in place is greatly determined by the physical design and accessibility of a home, as well as community features like the availability of nearby services and amenities, affordable housing, and transportation options.
Alternative Housing Voucher Program (AHVP)
A DHCD rent subsidy program funded by the state for people under 60 with disabilities on waiting lists for public housing.
Americans with Disabilities Act (ADA)
Federal law enacted in 1990 that requires public agencies to operate housing programs in ways that make them accessible, that do not discriminate against persons with disabilities and provide the most integrated setting appropriate to their needs. It also requires that homeless shelters be accessible. It generally does not apply to private housing (but many of its provisions are included in the 1988 amendments to the Fair Housing Act).
Funding allocations made on a regular basis by a committee or other authorizing body. The level of appropriations made available to federal , state or local agencies for housing and related programs may vary from year to year on the basis of other urgent budget needs and/or political shifts. In contrast, dedicated funding sources generally guarantee that all revenue from a specified source will be available for use by a designated program or entity.
Click here to read about the use of dedicated funding sources to support housing trust funds.
The area median income (AMI) is a statistic generated by the U.S. Department of Housing and Urban Development (HUD) for purposes of determining the eligibility of applicants for certain federal housing programs. HUD determines AMI on an annual basis for each metropolitan area and non-metropolitan county, making adjustments for household size and other factors. Different housing programs use different percentages of AMI – such as 30 percent of AMI or 80 percent of AMI – as maximum income limits for admission. Many state and localities have adopted HUD’s income limits for their own programs, or use a variation on the HUD limits – for example, 120 percent of AMI.
Click here to leave this site and access the latest HUD income limits and AMI levels for your community.
Base flood elevation (BFE) refers to the estimated level of water associated with the 100-year flood, which is a severe flood reaching or surpassing a certain water level that has a 1-percent chance of occurrence in any given year.
Below-market is a general term that refers to housing that rents or sells for less than prevailing market levels. In some cases, below-market housing is used synonymously with affordable housing. In other cases, below-market housing is targeted at moderate-income families with somewhat higher incomes than those served by federal affordable housing programs. Generally, housing can be offered at below-market levels only with a public subsidy or with a public concession such as density bonuses or reduced-cost publicly-owned land.
A bond is a type of loan or debt security that is issued by a public authority or credit authority for long-term investments. Bonds are repaid when they "mature," typically 10 years or more after being issued. Click here to read about the different types of bonds used to finance affordable homes.
A builder's remedy is a legal cause of action available in certain states to a developer that has been denied a building permit for development of affordable homes. The "remedy" occurs when a state enforcement agency, such as a court or other special authority, overrides local decision-making and grants permission to move forward with development. In New Jersey, the builder's remedy has been established as a tool for encouraging municipalities to meet their fair share housing targets.
A permit issued by a local government agency that allows the construction or renovation of a home.
State law authorizing the creation of Urban Redevelopment Corporations to develop residential, commercial, industrial, civic, recreational, or historic projects in areas that are considered to be blighted, decadent or substandard.
State law permitting cities and towns to set up redevelopment authorities, subject to DHCD approval, to redevelop blighted or slum areas, carry out urban renewal projects and become eligible for URDG funds. While the urban renewal program no longer exists, localities can still create redevelopment authorities and apply for specific redevelopment grants. Redevelopment authorities have the power of eminent domain and they are exempt from the state’s Uniform Procurement Act when engaged in property disposition and development, making them powerful tools for large scale redevelopment projects.
State law permitting municipalities to establish Economic Development Industrial Corporations (EDICs) for the purpose of implementing local economic development plans and projects to reduce unemployment and eliminate blight. Only communities that have been designated by the U.S. Department of Labor as labor surplus areas due to high unemployment are eligible.
(See “Massachusetts Affordable Housing Trust Fund”)
The state’s comprehensive permit law, enacted in 1969, which established an affordable housing goal of 10% for every community. In communities below the 10% goal, developers of low and moderate income housing can seek an expedited local review under the comprehensive permit process and can request a limited waiver of local zoning and other restrictions which hamper construction of affordable housing. Developers can appeal to the State if their application is denied or approved with conditions that render it uneconomic and the state can overturn the local decision if it finds it unreasonable in light of the need for affordable housing. (Chapter 774 of the Acts of 1969; M.G.L. c.40B §20-23); see also Comprehensive Permit.)
The state’s subdivision control law spells out the powers and duties of local planning boards, whose approval is required before land can be subdivided. It specifies the type of provisions the local boards can adopt and specifies certain procedural requirements. Subdivisions of land with adequate road frontage do not require local approval (called ANR, or approval not required plans).
The Community Preservation Act Enabling Legislation. Allows communities, at local option, to establish a Community Preservation Fund to preserve open space, historic resources and community housing, by imposing a surcharge of up to 3% on local property taxes. The state provides matching funds from its own Community Preservation Trust Fund, generated from an increase in certain Registry of Deeds’ fees. (Chapter 267 of the Acts of 2000)
State public housing program. Administered by Local Housing Authorities (LHAs), provides rental housing for low-income elderly (age 60+) and handicapped persons
State public housing programs. Administered by Local Housing Authorities (LHAs), they provide rental housing with specialized services for low-income persons with mental illness, mental retardation or physical disabilities
State public housing programs. Administered by Local Housing Authorities (LHAs), they provide rental housing for families. Chapter 200 housing developments were constructed in the 1940s and 50s, originally to house low-income veterans. The program was replaced in the 1960s by the 705 program, with the goal of providing smaller-scale housing (maximum 24 units), in neighborhood settings, for low-income families. During the late 1980s and early 90s, some 705 funding was made available to allow LHAs to purchase units on the private market.
* There has been limited funding for the creation of new units under any of these public housing programs in recent years.
Citizen Planner Training Collaborative (CPTC)
A professional education initiative affiliated with UMass that provides local planning and zoning officials with tools, training and information about land use planning.
A clear title is a signal that a property can be purchased without worrying about old liens or owners coming back to assert claims to the property. This status is also referred to as an 'insurable title," since the property owner can get title insurance to protect against losses if there was an error in checking the title history; and as a "marketable title," since having a clear title facilitates marketing and selling a property.
A form of shared ownership housing where all residents own stock in the corporation that owns the property. They do not own their own units, but co-op share ownership entitles a resident to a long-term lease on a unit and a vote in the governance of the property. Limited equity cooperatives are a form of affordable, resident-controlled homeownership in which the individual share purchase prices are very low so that the resident does not need mortgage financing to buy in. Like rental properties, co-ops may be syndicated to raise money for the construction.
Cohousing is a type of residential development designed to encourage social interaction and active neighboring. Homes, which are typically smaller than average and clustered around a common house, can be single-family or multifamily, attached or detached, rented or owned. Cohousing developments are often planned by their eventual residents, and communities are managed collaboratively. In addition to the common house, open space and other facilities are owned in common and maintained by residents, and opportunities to socialize (e.g., group meals) are common. Residents occupy individual, complete living units, but may share additional kitchen, dining and recreational facilities with other residents. Ownership and design may take a variety of forms.
Community Action Agency (CAA)
CAAs, sometimes called CAP agencies, are publicly and privately funded agencies that provide social services, such as fuel assistance, daycare and education to low-income residents. By law, the State must distribute at least 90% of its federal Community Services Block Grant funds to CAAs. The state also contracts with CAA’s to operate its fuel assistance and weatherization programs. CAAs may also be involved in the development and management of affordable housing.
Community Development Action Grant (CDAG)
A state funded program using housing bond bill funds, to help finance infrastructure necessary to make affordable housing and economic development projects feasible.
Community Development Advance
A reduced-rate advance (loan) that be accessed by FHLB member institutions to help finance the purchase, construction, rehabilitation, or predevelopment financing to projects in income-eligible neighborhoods.
community development block grant (CDBG)
HUD program which provides flexible annual grants on an entitlement basis, by formula, directly to states and larger communities (population over 50,000) for activities benefiting low and moderate income people, including housing, community development, economic development, services. A Federal program created under the Housing and Community Development Act of 1974. This program (often known as CDBG) provides annual grants on a formula basis to states and larger cities and urban counties to be used for a wide range of community development activities directed toward neighborhood revitalization, economic development, affordable housing and improved community facilities and services.
Community Development Corporation (CDC)
A form of community-based organization engaged in local housing and economic development activities. Although CDCs vary in size and scope, most are nonprofit, tax exempt 501(c) 3 organizations. Under Massachusetts law, CDCs must be located in and serve a designated community where the median family income is below 85% of the regional median family income. There are 67 CDCs operating in Massachusetts today.
Community Development Finance Corporation (CDFC)
A state quasi-public agency, created in 1975, to provide flexible financing for small business, commercial development and housing ventures expected to provide a public benefit. (increased employment and affordable housing opportunities in targeted low-income areas). It works in partnership with community development corporations (CDCs).
Community Development Financial Institution (CDFI)
An organization certified by the US Department of the Treasury as a lending institution that has a primary mission of promoting community development. To be certified, the organization must serve a target market, offer development services, maintain accountability, and be a non-government controlled legal entity. CDFIs provide a wide range of financial products and services, including mortgage financing, commercial loans, financing for community facilities, and financial services needed by low-income households. Some also provide technical assistance.
Community Development Fund (CDF)
A component of the Massachusetts Community Development Block Grant Program, CDF supports revitalization efforts and addresses the needs of low and moderate-income residents by supporting housing, community and economic development activities in Massachusetts cities and towns.
Community Economic Development Assistance Corporation (CEDAC)
A quasi-public agency created by the Legislature in 1978 to provide development assistance to nonprofit developers in order to increase the supply of affordable housing and help revitalize chronically distressed areas. By statute, it can only provide services to nonprofit corporations.
Community Enterprise Economic Development (CEED)
A state funded program providing operating funds for CDCs.
Community Housing Development Organizations (CHDOs)
Nonprofit community-based organizations which meet certain HUD criteria and thus qualify to apply for HOME funding set-aside specifically for non-profits.
Community land trusts are a form of shared equity homeownership designed to ensure that homes made affordable through public or philanthropic subsidies remain affordable over the long-term. Under the traditional community land trust model, a nonprofit community land trust is established to own the land on which homes are situated. The trust then sells the physical structures to home purchasers for an affordable price, along with a long-term lease on the land. When the home is sold, it must be sold an affordable price to a qualifying homebuyer.
Click here to learn more about community land trusts and other shared equity strategies.
Community Preservation Act (CPA)
Community Reinvestment Act (CRA)
A federal law enacted in 1977 (and amended in 1989), which states that all federally insured financial institutions have a continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered. Such institutions are required to demonstrate to their regulatory agencies, through regular examinations, that they are meeting the credit needs of their community, including low and moderate-income neighborhoods. That record is taken into account when the institution applies to enter new markets or merge or acquire another institution.
Community Services Block Grant (CSBG)
Federal poverty reduction program created to provide services to encourage self-sufficiency for low-income families and individuals. CSBG provides funding to the state’s 25 Community Action Agencies (CAAs) for a wide range of social service programs including housing assistance, child care, youth and family development, elderly services, fuel assistance and many others.
Comprehensive Permit (Chapter 40B)
Expedited permitting process for developers building affordable housing under Chapter 774 “anti-snob zoning” law. A comprehensive permit, rather than multiple individual permits from various local boards, is issued by local zoning boards of appeals to qualifying developers.
Comprehensive Plan (See “Master Plan”)
Comprehensive Regional Planning
Municipal planning on a metropolitan or regional level
that is based on overall, not jurisdictional, boundaries. May include
changes in jurisdictional boundaries, but typically addresses services
and/or land use planning.
A conditional use permit (CUP) is granted by a municipality to authorize a development type or land use on a specific lot that would not otherwise have been permitted by the underlying zoning code. In many cases, the permit is granted only upon the fulfillment of certain conditions. For example, the developer of a multifamily project may receive permission to build at a higher density than ordinarily allowed in exchange for the inclusion of a modest share of affordable homes in the development.
A type of real estate ownership in which owners own their own units plus an undivided share of all common areas. In Massachusetts, condominiums are established under MGL Chapter 183A. Limited equity condominiums are those where the resale price is regulated, through a deed covenant, a regulatory agreement, a land trust or another mechanism.
Housing accommodation that offers separate rooms or apartments but provides shared activities of daily living with other residents. May be rental or ownership.
A legal agreement, often used to preserve rural areas or greenfields, in which a government or nonprofit can purchase a property in return for the guarantee of preserving it from development.
Consolidated Plan (ConPlan)
A combination planning document and performance report required of states and communities receiving HUD block grants. The ConPlan establishes local housing needs and priorities, and HUD uses it to assess proposed local housing policies and funding requests. Applicants for funding under any of 17 other HUD programs must show that their application is consistent with the local ConPlan. The ConPlan has several components, including: housing and community development needs analyses, an annual action plan, and an annual performance report.
In the context of housing policy, a covenant is an agreement that restricts the ways in which a home may be rented and/or sold. In the past, so-called "restrictive covenants" were used to limit the potential buyers of homes to members of specified racial or religious groups. Today, however, affordability covenants are used to ensure that homes made affordable through public subsidies remain affordable to future renters or homebuyers.
A credit and debt profile assesses the financial history of an individual, business, jurisdiction or other entity. Lenders often require a credit and debt profile of their borrowers to assess their credit worthiness and establish loan terms and interest rates for a home mortgage.
The debt to equity ratio is a financial ratio used to determine whether a government agency, business, household, or other entity can safely borrow over long periods of time. The ratio is calculated by dividing an entity's outstanding debt by the amount of equity it holds. A high debt to equity ratio may indicate that an entity is financing its growth with debt. For government agencies, debt to equity ratio is important because it will determine whether it has a strong or weak bond rating.
Restrictions or limitations on the use of property, as noted in a deed. Deed restrictions are one mechanism for maintaining the long-term affordability of a home with a significant public subsidy.
Permission granted by a municipality to build more or larger units than otherwise allowed by the existing zoning codes. Density bonuses are sometimes included as an "offset" to compensate developers for revenue that may be lost due to a requirement in an inclusionary zoning ordinance that a share of newly developed units be affordable to working families. In other cases, density bonuses are granted as an incentive to encourage owners to voluntarily include affordable units within new developments.
Department of Housing and Community Development (DHCD)
Massachusetts DHCD is the state's lead agency for housing and community development programs and policy. It oversees the state-funded public housing, administers rental assistance programs, provides funds for municipal assistance, and funds a variety of programs to stimulate the development of affordable housing. Until July 1996, DHCD was known as the Executive Office of Communities and Development. Prior to that, it was also called the Department of Community Affairs.
Department of Mental Health (DMH)
Massachusetts DMH, an agency within EOHHS, is the state's key provider of services to people with psychiatric disabilities, primarily through day programs, treatment and counseling services, and community-based housing. Its budget includes funds to assist homeless clients through outreach, shelter and transitional housing programs and to provide services for clients in community-based housing, as well as some funds for rental assistance.
Department of Mental Retardation (DMR)
Massachusetts DMR, an agency within EOHHS, is the state's key provider of services for people with mental retardation, primarily through a variety of social service programs and community-based housing. Like DMH, its budget includes funds to develop and staff community-based residences and subsidize the living costs of the residents.
Department of Public Health (DPH)
Massachusetts DPH, an agency within EOHHS, is the state's key agency for public health programs, including lead paint poisoning prevention, emergency and longer-term substance abuse treatment programs, programs for children at risk for developmental or other disabilities, programs for people with chronic medical problems and services for people living with AIDS. Its budget includes limited funds for the housing needs of its consumers, including supported housing services and rental assistance.
Department of Social Services (DSS)
Massachusetts DSS, an agency within EOHHS, funds most of the state's social services for families and children, including services and shelters for battered women, protective services for children, adoption, foster care and day care programs. Its budget includes limited funds for emergency shelter programs for children, adolescents and victims of domestic violence as well as transitional housing programs and rental assistance for specialized housing. Cases are handled in 26 area offices.
Department of Transitional Assistance (DTA)
Massachusetts DTA provides financial assistance and services for low-income families and individuals. In addition to administering the Temporary Aid for Families with Dependent Children (TAFDC) program which replaced AFDC under state welfare reform, EAEDC (Emergency Aid to the Elderly, Disabled and Children) and food stamp programs, it is a key provider of homeless services. It operates over 120 shelters for homeless families and individuals and pays rent arrearages to prevent the eviction of low-income families.
Department of Veterans Services (DVS)
Massachusetts DVS, an agency within the Executive Office for Administration and Finance, oversees a variety of programs for veterans of the Armed Services, including outreach centers, shelters and transitional housing for homeless and formerly homeless veterans and their families (including their parents).
Division of Capital Asset Management and Maintenance (DCAM, formerly the Division of Capital Plannin
The state agency within the Executive Office of Administration and Finance responsible for major public building construction and real estate services for the Commonwealth. It manages the redevelopment of over 3,700 acres of surplus state property.
The fee a government charges for reporting a real estate purchase or sale in the public record. Document recording fees are one source of funding for housing trust funds.
The right of a person, government agency, or public utility company to use public or private land owned by another entity or individual for a specific purpose.
The economic principle that as the scale of production increases, the cost of producing each additional unit decreases, leading to a lower average cost per unit. This principle helps explain, for instance, some of the costs advantages of manufactured homes and larger builders.
(See “McKinney Emergency Community Services Homeless Grant”)
Emergency Assistance (EA)
A state program to assist low-income pregnant women and households with children who are homeless or at-risk of homelessness.
Emergency Shelter Grants (ESG)
A federal program designed to improve the quality of existing emergency shelters for homeless people, provide additional shelters and transitional housing, meet shelter operating costs, provide essential services to homeless individuals, and support programs to end homelessness. Funding is provided to states and cities according to CDBG formula.
Right of a government agency to take private property for a public purpose. Fair compensation must be paid to the owner whose property is taken.
employer-assisted housing
Employer assisted housing is housing assistance provided by employers for their workers or the broader community. A growing number of employers are extending employer assisted housing benefits to their workers by providing grants or loans to assist with down payments (for homebuyers) or security deposits (for renters), offering homeownership education and counseling, and investing in the development of affordable homes in the community.
Click here to learn more about employer-assisted housing and other strategies for leveraging employer interest in affordable homes.
Specific geographical areas selected by the Departments of Housing and Urban Development or Agriculture to receive tax and other benefits intended to improve the economic viability of the area. No new areas are currently being designated for these programs.
Environmental Site Assessment (ESA)
Under federal law, purchasers of contaminated land and/or buildings are liable for all cleanup costs unless they conduct “all appropriate inquiries” prior to acquiring the site. To meet the “all appropriate inquiries” standard and thus obtain liability protection, a potential purchaser must conduct a “Phase I Environmental Site Assessment” in advance. Federal EPA standards detail what the assessment should include. Some lenders, including Fannie Mae and Freddie Mac, require additional items beyond the EPA requirements (i.e. radon, lead based paint, asbestos).
The Phase I environmental assessment must be prepared by a qualified firm and takes the form of a report that identifies potential or existing contaminants or other environmental hazards on the property (land and buildings). It does not include sampling of soil, groundwater, or building materials. It may note site observations, such as abandoned railroad tracks, dumped tires, or empty metal drums as well as the area’s history, such as a leaky storage tank on an abutting parcel and recommend further investigation. It reviews all public records for the site and abutting sites, past ownership and how the property was used historically. An examination of the soils is recommended if there is any question about possible contamination (e.g., lead paint).
As used in the housing context, an escrow account is a separate account into which the lender puts a portion of each monthly mortgage payment. An escrow account provides the funds needed for such recurring expenses as property taxes, homeowners insurance, mortgage insurance, etc. Requiring families to make monthly payments into an escrow account to cover these expenses is generally viewed as a desirable practice that helps families manage their housing costs by spreading the payments for these expenses throughout the year.
Discretionary fees, dedications, or off-site improvements imposed as a condition of approval of a particular development project by the municipality or county. Like impact fees, exactions are meant to mitigate off-site impacts of a development.
Executive Office of Elder Affairs (EOEA)
A Massachusetts Cabinet level agency that includes many of the state agencies that perform planning functions related to transportation.
Executive Office of Environmental Affairs (EOEA)
A Massachusetts cabinet level agency that oversees programs and policies relating to the environment. EOEA is made up of the Metropolitan District Commission and the Departments of: Environmental Protection; Environmental Management; Food and Agriculture; Fisheries, Wildlife and Environmental Law Enforcement; and the Metropolitan District Commission.
State executive order, issued in 1982 but no longer in effect, which required all state agencies to withhold discretionary development-related state assistance from municipalities that were unreasonable restrictive in their housing practices.
State executive order, subtitled “Assisting Communities in Addressing the Housing Shortage,” issued in 2000. It makes available up to $30,000 in planning resources to each community in the state to plan for new housing opportunities while balancing economic development, transportation infrastructure improvements and open space preservation. It also gives priority in the awarding of $364 million+ in annual discretionary funding to communities that have been certified as having taken steps to increase the supply of housing to individuals and families across a broad range of incomes.
expiring use restrictions (EUR)
Refers to affordable housing where the restrictions on rents and/or incomes of occupants could or will expire in the near future if owners prepay their publicly assisted mortgages and convert the units to market rate housing. The units were built with federal and/or state subsidies (such as low cost mortgages, interest subsidies, rent subsidies and loan guarantees). While mortgages and other assistance often had terms as long as 30-40 years, many gave owners the option to prepay the mortgage after 20 years and thus remove use restrictions on the property.
Household income below 30% of area median, as defined by HUD for its own programmatic purposes.
A non-rural residential community located outside a city, beyond the suburbs
Any home that is built in a factory setting as opposed to on site. This can include manufactured and modular homes as well as pre-cut (in which building materials are factory-cut to design specifications then transported to the site for assembly) and panelized units (in which panels—a whole wall with windows, doors, wiring and outside siding—are transported to the site and assembled).
Federal legislation, first enacted in 1968 and expanded by amendments in 1974 and 1988, that provides the Secretary of HUD with investigation and enforcement responsibilities for fair housing practices. Prohibits discrimination in housing and lending based on race, color, religion, sex, national origin, handicap, or familial status. There is also a Massachusetts Fair Housing Act, which extends the prohibition against discrimination to sexual orientation, marital status, ancestry, veteran status, children, and age. The state law also prohibits discrimination against families receiving public assistance or rental subsidies, or because of any requirement of these programs.
Starting point for maximum rents allowed by HUD in the Section 8 rental assistance program. Updated and published annually, FMRs represent HUD’s estimate of the 40th percentile gross rent (rent paid to landlord plus any tenant-paid utilities) for an apartment in the conventional marketplace. HUD sets FMRs by unit size (0-bedroom, 1-bedroom, etc.) and regions within each state. The current FMRs are posted on HUD’s website at http:www.huduser.org/datasets/fmr.html
Generally, local housing authorities use the FMRs as their “payment standard” - the maximum rent they will subsidize under their Section 8 tenant-based or project-based voucher program, but they are allowed to set the payment standard at up to 10% above or below the FMR for part or all of their region or certain unit sizes if they feel the FMRs are higher or lower than local rents.
To promote an equitable distribution of affordable homes within a state or region, fair share requirements assign each municipality a target number of affordable units to produce. Progress towards this target may be enforced through imposition of a builder's remedy or other expedited appeals process that facilitates development of affordable homes in communities that haven't met their goal. New Jersey's fair share program, sometimes referred to as the Mount Laurel decisions, is one of the best-known fair-share programs.
Click here for more information on state fair share programs.
Family Self Sufficiency (FSS) Program
Family Self-Sufficiency is a HUD program for public housing and Section 8 tenants. Tenants who choose to participate sign a contract outlining progress they seek to make toward economic self-sufficiency over five years; in exchange, local housing agencies commit to provide appropriate services (day care, training, etc.) to help tenants meet goals and put any rent increases which may occur as participant incomes rise into an escrow account for tenants to use at end of program.
Family Unification Program
A HUD Section 8 rent subsidy program which provides rent subsidies to families, including victims of domestic violence, at risk of losing their children to foster care (or unable to regain them) due to lack of housing.
Federal Deposit Insurance Corporation (FDIC)
Federal agency established in 1933 that guarantees (within limits) funds on deposit in member banks and thrift institutions and performs other functions such as making loans to or buying assets from member institutions to facilitate mergers or prevent failures. Regulates some banks under the Community Reinvestment Act.
Federal Home Loan Bank of Boston (FHLBB)
One of the 12 district banks, the FHLBB covers the 6 New England states and is owned by more than 460 New England financial institutions. A wholesale bank (a bank for banks), it provides access to credit for its members and administers several programs to promote community development and expand affordable housing.
Federal Home Loan Bank System (FHLB)
Created by Congress in 1932, the FHLB System's public policy mission is to support residential mortgage lending and related community investment through its member financial institutions. The System fulfills its mission by providing members with access to reliable, economical funding and technical assistance, as well as special affordable housing programs. Federal Home Loan Banks are government-sponsored enterprises, federally chartered but privately capitalized and independently managed.
Federal Home Loan Mortgage Corporation
(FHLMC or Freddie Mac) Congressionally chartered agency established in 1970 (and privatized in 1989) to buy qualifying residential mortgages from originating lenders. The loans are either kept in portfolio or packaged and sold as securities. Freddie Mac also offers programs with more flexible underwriting guidelines for lower income homebuyers. With Fannie Mae, the corporation's activity has helped to create an enormous secondary mortgage market.
Federal Housing Administration (FHA)
Federally sponsored agency, now a division of HUD, that insures lenders against loss on residential mortgages. It was founded in 1934 in response to the Great Depression to execute the provisions of the National Housing Act.
Federal Housing Finance Board (FHFB)
U.S. government agency created by Congress in 1989 to assume oversight of the Federal Home Loan Bank System from the dismantled Federal Home Loan Bank Board.
Federal National Mortgage Association
(FNMA or Fannie Mae) Created in 1938 to purchase FHA, and later VA and conventional mortgages, Fannie Mae is now a privately-owned and managed, federally chartered corporation, the largest source of home mortgage funds in the United States. It buys qualifying residential mortgages from originating lenders and either keeps them in portfolio or packages and sells them as securities. Fannie Mae also offers programs with more flexible underwriting guidelines for lower income homebuyers.
Federal Reserve Board (FRB)
Governing board of the Federal Reserve System. Its seven members are appointed by the President of the United States, subject to Senate confirmation, and serve 14-year terms. The Board establishes Federal Reserve System policies on such key matters as reserve requirements and other bank regulations, sets the discount rates, and tightens or loosens the availability of credit in the economy.
Insurance program by which the federal government stimulates new housing production. When a mortgage is FHA insured, the Federal government promises to buy it from the lender at full value if there is any default.
The ratio of the floor area of a building to the area of the lot on which the building is located. For example, a one-story building which covers the entire lot and a four-story building which covers a quarter of the lot both have a floor area ratio (FAR) of 1.0 (or 1:1). This is a common way to compare density of development from one location to another. A commonly used measure of building intensity, FAR is the relationship between building volume and land area. Determined by dividing the gross floor area of all buildings on a lot and the area of that lot.
Assistance provided to help struggling homeowners avoid a foreclosure and possibly retain their home. Foreclosure prevention programs often include counseling and financial assistance. Click here to learn more.
A loan that is forgiven if program requirements are met for a specified period of time. The loan may be forgiven incrementally over time – for example, 20 percent per year for five years – or all at once at the end of the specified time period.
DHCD program, using federal LIHEAP funds—low income heating assistance programs—funds, which makes grants to low- income families, elders and people with disabilities to help pay winter heating costs.
A type of bond issued by a state or locality that is backed by the issuer's taxing power. Because general obligation, or GO, bonds are repaid through the general revenue – or through a specific tax levied for that purpose – they are an ideal resource for subsidizing public works projects such as affordable homes that are not expected to generate sufficient revenue to fully repay the debt. A vote of the electorate is often necessary to authorize general obligation bond issues.
Click here for more information on using general obligation bonds for housing.
A process in which a low-cost – and possibly deteriorating – neighborhood undergoes revitalization through reinvestment in its physical assets. Gentrification is often associated with an influx of higher-income residents, an increase in property values, and the displacement of at least some of the original lower-income residents, which can make it controversial.
Geographic Information System (GIS)
A computerized system that stores and links spacially defined data in a way that allows information display and processing and production of maps and models. A powerful planning and analytical tool.
Government National Mortgage Association (GNMA or Ginnie Mae)
An agency of HUD, Ginnie Mae guarantees payment on mortgage-backed pass-through-securities, which represent pools of residential mortgages insured or guaranteed by the FHA, the Veterans Administration, or the Rural Housing Service. It also manages a portfolio of federally owned mortgages. It does not purchase loans.
Government Sponsored Enterprise (GSE)
An enterprise established by the federal government but privately owned and operated. These enterprises are excluded from the budget totals because they are classified as private entities. However, financial information concerning them is included in the budget. Fannie Mae and Freddie Mac are GSEs, as are the Federal Home Loan Banks.
Green building refers to a set of building design and construction practices that seek to reduce a building\'s environmental impacts by improving energy efficiency and indoor air quality, reducing water use and consumption, choosing sustainable building materials, and situating the home in a manner that takes advantage of sunlight and other natural amenities. A whole-building and systems approach to design and construction that employs building techniques that minimize environmental impacts and reduce the energy consumption of buildings while contributing to the health and productivity of its occupants.
Click here to go read more about energy efficiency and affordable housing.
Development that uses environmentally friendly building practices and energy efficiency. There are a number of public and private incentives for green development, and increasingly, nonprofit developers use green construction as a way of increasing the expendable resources of lower income persons.
Undeveloped land. Smart Growth principles dictate that new development be steered away from greenfields to the maximum extent possible and toward sites where infrastructure and public transportation already exist, or to contaminated and/or underutilized sites that can be reclaimed to accommodate new development.
Green areas, including parks, that are often connected and accessible to the everyday lives of people in existing neighborhoods and communities.
Term coined by the Congress for the New Urbanism for failing retail properties (shopping centers) that require significant public and private-sector intervention to stem decline and redevelop into mixed use neighborhoods.
A central tenet of sustainable development that espouses the idea that uncontrolled growth cannot be sustained over time and that communities should intentionally plan future developmen.
Heating Energy Assistance Retrofit Task Weatherization Assistance Program (HEARTWAP)
A state-run weatherization program providing emergency heating system repairs, tune-ups, retrofits, etc. to low-income households.
Established by Congress in 1990, this federal program is designed to expand the supply of decent affordable housing for low- and very low-income families and individuals. HOME funds are provided each year by HUD to states and localities, which determine how the funds are spent. HOME funds may be used for: tenant-based rental assistance; assistance to homebuyers; property acquisition; new construction; rehabilitation; site improvements; demolition; relocation; and administrative costs.
HOME Investment Partnerships Program (HOME)
A federal program run by HUD which provides annual grants on an entitlement basis to states, large cities and consortia of smaller communities for affordable housing activities, including homeownership, rent subsidies, housing development and rehabilitation.
Home modifications are retrofits or adjustments to existing homes that are undertaken to improve physical accessibility for older adults and people with disabilities. They can take a variety of forms depending on the level of investment and the scope of the improvement and address any number of obstacles to independent living. Home modifications range from simple improvements such as adding non-slip strips to bathroom floors or other smooth surfaces, improving lighting, providing telephones with large numbers and letters, and installing grab bars and lever door handles. More complex (and expensive) modifications include, but are not limited to, the installation of ramps, chair lifts, stair glides, widened doorways, roll-in showers, and lowered countertops.
Home Modification Loan Program (HMLP)
A state funded loan program that provides loans for access modifications to the principal residence of elders, adults with disabilities and families with children with disabilities. Based on income eligibility, from $1,000-25,000 may be extended as a deferred payment loan, due upon sale or transfer of the property, or as a low interest amortizing loan. The loans are secured by a mortgage lien on the property.
Home Mortgage Disclosure Act (HMDA)
A federal law enacted in 1975 (and amended in 1989) that requires home mortgage lenders to compile and make available information on every mortgage loan application received. Such information includes the race, sex, and income of the potential borrower and the disposition of the application.
HOP (Homeownership Opportunities Program)
DHCD program active in the 1980s and early 1990s which provided 5%-down MassHousing mortgages with state-funded interest subsidies to first time homebuyers purchasing homes in developments where developer reserved at least 30% of units for buyers earning less than 80% of median. Some units were sold to LHAs for family public housing.
A federal program that provides funding for the revitalization of severely distressed or obsolete public housing sites. Funds can be used for demolition or rehabilitation of units; construction of replacement units; rental assistance to tenants who are displaced; provision of self-sufficiency services for tenants; and for programs designed to improve management.
Housing Appeals Committee (HAC)
A quasi-judicial body within DHCD, which hears appeals by developers, local zoning boards on comprehensive permit (Chapter 40B) decisions by local Zoning Boards of Appeal.
housing consumer education centers
A statewide information and referral network that assists tenants, landlords, current and prospective homeowners with their housing problems. The Centers are located at agencies that provide a variety of housing services throughout Massachusetts.
housing counseling agency
An organization whose work focuses in whole or in part on providing homeownership education and counseling. Click here to learn more about homeownership counseling.
Housing Development Support Program (HDSP)
A component of the Massachusetts Community Development Block Grant (CDBG) Program, HDSP provided gap financing for affordable housing projects of seven units or less, in smaller communities, often as upper story apartments in downtown areas.
Housing Innovations Fund (HIF)
State funded program, using bond proceeds to help finance innovative forms of affordable housing, such as SROs, transitional housing, limited equity cooperatives and community residences and to preserve existing affordable housing developments.
Housing Opportunities for People With AIDS (HOPWA)
Federal program that provides funds to states and cities for housing assistance and supportive services for low-income people with HIV/AIDS and their families.
DHCD program to help homeless families in shelters/hotels/motels apply for housing subsidies and find permanent affordable housing. Also helps DTA-referred families at risk of homelessness.
State-funded program to prevent homelessness and assist tenants, landlords and homeowners with housing problems and questions.
Housing Stabilization Fund (HSF)
State program using bond proceeds to fund a variety of activities including homeownership, affordable housing development and preservation, demolition of abandoned housing, and local match to federal HOME grants.
A fund established by state legislation or local ordinance that uses public funds to finance the construction or renovation of affordable housing. The fund typically has a dedicated, ongoing source of revenue. Most are administered by a public agency, but some are administered by foundations or other entities.
One-time assessments, which may be applied by municipalities to new development to fund the expansion or construction of municipal facilities and infrastructure that benefit the development.
A cash payment some municipalities allow developers to pay instead of including affordable units within a particular development, as required under an inclusionary zoning policy. In-lieu fees are often deposited into a housing trust fund, where they are used to fund other affordable housing initiatives.
Zoning provisions that encourage but do not require developers to provide certain amenities or qualities in their projects in return for identified benefits, such as increased density or expedited processing.
A zoning ordinance that requires a developer to include affordable housing as part of a development, or contribute to a fund for such housing.
The highest income level at which a household qualifies for participation in a subsidy program. In most housing programs, income limits are expressed as a percentage of the area median income, as determined by HUD.
A policy designed to prioritize families with incomes below a specified level for a certain percentage of newly available assistance. Under federal law, for example, 40 percent of newly available public housing units must be provided to families with incomes below 30 percent of the area median income (AMI). The balance of units may be rented to families with incomes as high as 80 percent of AMI – the income eligibility limit. Local communities may target assistance more deeply than required by federal law.
See Also: area median income, income eligibility limit
The practice of building on vacant or undeveloped parcels in dense areas, especially urban and inner suburban neighborhoods. Promotes compact development, which in turn allows undeveloped land to remain open and green.
The cost of providing the various systems and facilities needed to support the operation of a community (e.g., sewer and water systems, electric systems, communication lines, roads). Some municipalities charge impact fees to developers or purchasers of new homes to help pay for the costs associated with the initial servicing of these homes.
Land banks are governmental or quasi-governmental entities dedicated to assembling properties – particularly vacant, abandoned, and tax-delinquent properties – and putting them to productive use. Land bank authorities acquire or facilitate the acquisition of properties, hold and manage properties as needed, and dispose of properties in coordination with city planners and in accordance with local priorities for land use.
Click here for information on how land banks help convert vacant and abandoned property to productive use.
limited equity cooperative
In this shared equity homeownership arrangement, households buy a "share" in the cooperative and in return receive the right to occupy one unit and share in decision-making for the development. Share prices are set by a formula specifically designed to keep membership affordable for future purchasers.
limited equity homeownership
Ownership housing in which resale values are restricted in order to maintain the long-term affordability of the units. A technique often used for housing developed with public assistance in order to reduce development costs (e.g. funding, relaxed zoning regulations, discounted sale of public land). Can take the form of a cooperative, a condominium or fee simple ownership.
Linkage fees are adopted by local governments to ensure that the additional housing needs generated through economic development and new job creation are met. In communities with linkage fee requirements, developers of non-residential buildings pay a fee, often based on project type (manufacturing, commercial, retail, etc.) and square footage, which is generally deposited in a housing trust fund and used to support affordable housing initiatives.
For more information, visit PolicyLink's Equitable Development Toolkit section on Commercial Linkage Strategies.
A regulation that mandates linkage fee requirements.
local and regional Housing Authorities (LHAs)
A housing authority set up by a city or town, or group of towns, in accordance with state law to provide low-income family or elderly housing.
Local Initiative Program (LIP)
A state program under which communities may use local resources and DHCD technical assistance to develop affordable housing that is eligible for inclusion on the state Housing Inventory. LIP is not a financing program, but the DHCD technical assistance qualifies as a subsidy and enables locally supported developments that do not require other financial subsidies to use the comprehensive permit process. At least 25% of the units must be set aside as affordable to households earning less than 80% of the area median.
Local Initiatives Support Corporation (LISC)
Local Initiatives Support Corporation is a national nonprofit organization established to help resident-led, community-based development organizations transform distressed communities and neighborhoods into healthy ones. By providing capital, technical expertise, training, and information, LISC supports the development of local leadership and the creation of affordable housing, commercial, industrial and community facilities, businesses, and jobs.
Some state and federal programs allow owners to give a “local preference” for available rental or ownership units to applicants who meet certain criteria, such as currently living in the city or town where the property is located. Program rules vary regarding the definition of “local preference”, the extent to which it can be used (all or some of the units) and when it applies (when units first become available or on turnover as well). In Massachusetts, State Department of Housing and Community Development (DHCD) allows communities to establish a “local preference” for up to 70% of the affordable units as long as the preference meets the requirements outlined in DHCD’s affirmative marketing guidelines. The DHCD guidelines, prohibit excessively narrow local preferences and allow the following categories: current residents, municipal employees, employees of businesses located in the community, households with children attending the locality’s schools, such as METCO students. Durational requirements are not permitted.
Household income below 80% of metropolitan area median, as defined by HUD, for its own programmatic purposes. (Note: 80% of median income is still considered by many to be moderate income and 50% of median low-income. These were the standards that had been used for more than 25 years until HUD changed them in the mid-1990s.)
Low-Income Heating Assistance Program (LIHEAP)
The federal program which provides funds to states for Fuel Assistance programs.
Low-Income Housing Tax Credit (LIHTC)
Federal tax credit for developers of affordable housing. States receive an annual dollar value of credits which they then allocate to qualifying projects based on priorities established in a state allocation plan. DHCD is the allocating agency for Massachusetts.
Homes built entirely in the factory under a federal building code administered by HUD. The Federal Manufactured Home Construction and Safety Standards (commonly known as the HUD Code) went into effect June 15, 1976. Manufactured homes may be single- or multi-section and are transported to the site and installed. The Federal standards regulate manufactured housing design and construction, strength and durability, transportability, fire resistance, energy efficiency, and quality.
Mark to Market (M2M) is a HUD that was implemented to address concern about the rising costs of rent subsidies in HUD's Section 8 multifamily housing program (also known as Project-based Section 8).
For more information visit the U.S. Department of Housing and Urban Development website on Section 8.
Massachusetts Affordable Housing Trust Fund (ATHF)
A $100 million revolving trust fund ($20 million per year for five years) established by the Massachusetts Legislature as Section 227 of Chapter 159 of the Acts of 2000, and now known as Chapter 121D. Administered by MassHousing, AHTF functions as a gap filler, the last funding piece necessary to make an affordable housing development financially feasible and sustainable for the long term. Funding is typically in the form of deferred payment loans. (AHTF is also a common acronym for affordable housing trust funds in general. See “Housing Trust Fund.”)
Massachusetts Housing Investment Corporation (MHIC)
A private, non-profit corporation which provides loans for affordable housing, equity funds for low-income housing tax credit (LIHTC) developments and loan guarantees for lead paint abatement loans. Created in 1991 by a consortium of banks, MHIC also administers a bridge financing program for tax credit projects in conjunction with the Massachusetts Housing Partnership Fund.
Massachusetts Housing Partnership Fund (MHP)
A quasi-public agency created by the Legislature in 1985 to support affordable housing and neighborhood development. It is funded by state-mandated contributions from interstate banks and has received state funds as well. It is governed by a seven-member board appointed by the Governor and the state's banking industry. MHP provides technical assistance and below-market financing to non-profit and for-profit developers and public agencies. It offers both long term fixed-rate financing and bridge loans for affordable rental housing, runs the "Soft Second" program for first time homebuyers together with DHCD, and provides funds to assess the feasibility of potential projects.
Massachusetts Rental Voucher Program (MRVP)
A state-funded rental assistance program begun in November 1992, as a revised version of the state’s previous rental assistance program (Chapter 707). It has both a project-based component and a tenant-based component.
MassDevelopment (formerly Massachusetts Development Finance Agency, MDFA)
A quasi-public agency created in 1998 by the merger of the Government Land Bank of the Massachusetts Industrial Finance Agency. MassDevelopment offers a variety of programs in support of economic development, large scale real estate development projects and brownfield clean-up including pre-development assistance, loans, loan guarantees, mortgage insurance and taxable and tax-exempt bond financing. Its programs can also be used for mixed commercial and residential projects.
McKinney Act/McKinney Programs
The Stewart B. McKinney Federal Homeless Assistance Act of 1987 established a number of federal programs through HUD, HHS and other agencies to provide housing and services to homeless families and individuals as well as those at risk of homelessness.
McKinney Emergency Community Services Homeless Grant (EHP)
A federal program providing annual grants from HHS to states for distribution to CAAs to provide services to the homeless.
Metropolitan Statistical Area (MSA)
The term is also used for CMSAs (consolidated metropolitan statistical areas), and PMSAs (primary metropolitan statistical areas), geographic units used for defining urban areas that are based largely on commuting patterns. Office of Management and Budget defines metropolitan areas for statistical purposes only, but many federal agencies use them for programmatic purposes, including allocating federal funds and determining program eligibility. HUD uses MSAs as its basis for setting income guidelines and fair market rents.
mixed income housing development
Development that includes housing for various income levels. In urban neighborhoods, it is a tool to deconcentrate poverty. In suburban neighborhoods, it is a design principle that designates a percentage of housing to different price ranges and may include persons with very low-income.
Projects that combine different types of development such as residential, commercial, office, industrial and institutional into one project. Mixed-use redevelopment of neighborhoods promotes comprehensive revitalization through retention or addition of housing, services and jobs.
A type of development that includes families at various income levels. Mixed-income developments are intended to promote deconcentration of poverty and give lower-income households access to improved amenities.
A type of development that combines various uses, such as office, commercial, institutional, and residential, in a single building or on a single site in an integrated development project with significant functional interrelationships and a coherent physical design.
Factory-built home produced prior to June 15, 1976, when the HUD Code went into effect. By 1970, mobile homes were built to voluntary industry standards that were eventually enforced by 45 of the 48 contiguous states.
Model codes are building codes developed by building and code enforcement industry associations. Many local governments choose to adopt a model code to avoid the time and expense associated with creating and maintaining their own building codes, while retaining the flexibility to add any amendments needed to ensure the code suits local conditions. In addition, model codes promote uniformity and consistency in code requirements and enforcement, allowing builders to more easily anticipate the level of work, timeframe, and costs associated with a proposed project before submitting their plans for review.
For more information on model codes visit the International Code Council website.
moderate housing problems
As used by HUD, moderate problems consist of cost burden above 30% but not over 50% of income, occupancy of housing with moderate physical problems, or overcrowding (more than one person per room).
Modular homes are houses that are built in sections that have been manufactured in a factory setting. These sections, or modules, are delivered and assembled at the intended site of use. Unlike manufactured homes, modular homes are subject to the same state, local and regional building codes as stick-built homes, and may be financed using the same mortgage products. Modular homes are often indistinguishable from neighboring homes that have been built entirely on-site; however producers are able to reduce their costs through use of a standardized production technique and other economies of scale in the production process.
For more information on modular homes visit the National Modular Housing Council website.
Debt instrument by which the borrower (mortgagor) gives the lender (mortgagee) a lien on property as security for the repayment of a loan. The borrower has use of the property, and the lien is removed when the obligation is fully paid. A mortgage normally involves real estate, and is commonly used to purchase a house.
Company, or individual, that originates mortgage loans, sells them to other investors, services the monthly payments, keeps related records, and acts as escrow agent to disperse funds for taxes and insurance. A mortgage banker’s income derives from origination and servicing fees, profits on the resale of loans, and the spread between mortgage yields and the interest paid on borrowings while a particular mortgage is held before resale.
mortgage interest deduction
The mortgage interest deduction is a tax break for homeowners. Homeowners with deductions that are large enough to warrant itemizing can deduct the amount of interest on their mortgage when they file their taxes. The mortgage interest deduction is the largest subsidy for housing in the United States.
A type of property that is designed for more than one family, such as a condominium or apartment building.
Neighborhood Reinvestment Corporation (NR)
A Congressionally chartered, federally funded, nonprofit corporation established in 1978 to assist in the revitalization of lower income neighborhoods. Its four core business areas: capacity building, affordable housing, resident leadership and community-based economic development. Services are provided to and through local NeighborWorks organizations. Support includes training, operational grants, capital investments, and technical assistance. NR also advances broader community goals and provides broader training through national Neighborhood Reinvestment Training Institutes.
NeighborWorks Network (NWOs)
A nationwide network of community-based, locally controlled nonprofits, NeighborWorks® organizations develop resident leadership, increase homeownership, produce and preserve affordable housing, and develop special programs such as commercial revitalization and economic development. Each NWO is an autonomous organization governed by local residents, business leaders and government officials. There are 12 NWOs in Massachusetts chartered by the Neighborhood Reinvestment Corporation (see below), including CDCs and Neighborhood Housing Services (the predecessor to NW). All receive operating assistance and capital investment from NR.
An affordable housing program run by the Federal Home Loan Bank of Boston (FHLBB), NEF provides advances (loans) to member financial institutions to finance affordable housing. NEF is one of the most widely used programs for the development of new mixed income ownership housing under the comprehensive permit.
New Markets Tax Credit (NMTC)
A new federal program (enacted by Congress in December 2000) that authorizes tax credits in an amount expected to generate $15 billion for the financing of economic development in low-income communities by 2007. The tax credits are available to investors in “community development entities,” which will use the proceeds to make loans and investments in businesses located in low-income communities. Expected to bridge financing gaps; create new partnerships among investors, communities, businesses, and government; and generate jobs, services and revitalization in distressed areas, in much the same way that LIHTCs did for affordable housing. Click here for a list of NMTC community development entities by state is available at
A movement to build and rebuild communities on a human scale with interconnecting streets, homes with porches, pedestrian friendly traffic patterns, shared open space and greenways, local retail businesses that are near housing and services, and construction practices that are environmentally sensitive. In suburbia, may be a new town center or in cities, may be called an urban village.
NIMBY is an acronym for Not in My Back Yard, which refers to opposition by nearby residents to development that they perceive to be undesirable. NIMBY sentiment sometimes leads to the derailment of plans to build affordable homes.
Notice of Funding Availability (NOFA)
A notice by HUD to inform potential applicants that program funding is available. The NOFA outlines the application process and timetable, program requirements, and includes names and addresses of agency personnel to contact for application forms and information.
Office of Thrift Supervision (OTS)
Agency of the U.S. Treasury Department created by the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), the bailout bill enacted to assist depositors that became law on August 9, 1989. The OTS replaced the disbanded Federal Home Loan Bank Board and assumed responsibility for the nation’s saving and loan industry. The legislation empowered OTS to institute new regulations, charter new federal savings and loan association and federal saving banks, and supervise all savings institutions and their holding companies.
A streamlined financing program offered jointly by MHIC and MHP, OneSource offers construction and permanent financing in a single package. Substantial savings can be achieved by using the same closing attorney, inspectors, appraiser, etc., and standardized loan documents.
A detailed application that is a useful tool for developers of complex tax credit projects that require multiple sources of public and private financing. It ensures that all the various funders are seeing the same set of numbers and the same complete financing picture (debt and equity).
A law adopted by a local government pertaining to an issue within its legal power.
An overlay district is a specific geographic area upon which additional land use requirements are applied, on top of the underlying zoning code, in order to promote a specified goal. Overlay districts may be used to allow greater flexibility in development types without undergoing a large-scale rezoning.
A zoning district, applied over one or more other districts, that contains additional provisions for special features or conditions, such as historic buildings, affordable housing, or wetlands.
Payment in Lieu of Taxes (PILOT)
Generally refers to arrangements under which governments exempt certain properties (e.g. public housing) or entities from real property or other taxes, but entity agrees to make some type of annual payment to the taxing entity, usually at a lower level than would be due under full taxation.
A state-funded technical assistance program administered by DHCD through which it provides small grants to local officials for short term problem solving
Refers to total monthly mortgage payments: principal, interest, real estate taxes and mortgage insurance
Plan review is the process of looking over development plans prior to submitting an application for a building permit to ensure new development meets safety, environmental, and other standards. Early plan review can help to expedite the issuance of building and other development permits by identifying any problems with an application early in the development process.
Click here for information on other strategies for expediting the permitting process to reduce the costs of housing.
A land development project involving a mixture of land uses and densities that is approved as a unit, rather than on a lot-by-lot basis. Among other things, the planned unit development process can be a vehicle for adopting cluster zoning that preserves open space without reducing the supply of housing through increased density on the portion of the development reserved for housing.
Click here to learn more about planned unit development and other innovative zoning tools.
The term preservation has several meanings in the housing context. It can refer to historic preservation, in which efforts are made to preserve and retain historic structures in a community, or to the preservation of rental housing, in which efforts are made to stem the loss of affordable rental homes. Rental housing preservation can focus on physical maintenance and repairs, the maintenance of a development’s affordability, or both.
Click here to learn more.
Project Based Assistance (PBA)
Term used to describe rental assistance which is assigned to a specific housing unit or housing development. Also refers to a specific Section 8 program.
Property and Casualty Initiative (PCI)
A private community development loan fund capitalized by a consortium of twenty-six Massachusetts property and casualty insurance companies in 1999. PCI lends to a range of community development projects including affordable housing. It makes most of its loans directly, but may also participate with other community lenders.
The federal public housing program was established to provide decent and safe rental housing for eligible low-income families, the elderly, and persons with disabilities. Public housing comes in all sizes and types, from scattered single family houses to high-rise apartments. There are approximately 1.2 million households living in public housing units, managed by some 3,300 housing agencies (HAs).
Public Housing Agency (PHA)
A public entity which operates housing programs: includes state housing agencies (including DHCD), housing finance agencies and local housing authorities. This is a HUD definition which is used describes the entities which are permitted to receive funds under or administer a wide range of HUD programs, including public housing and Section 8 rental assistance. It includes both local and regional housing authorities (LHAs) and state housing agencies, such as DHCD.
Developed or undeveloped land owned by a government entity. Examples include school buildings, public hospitals, parking lots, surplus properties, tax-foreclosed properties, and other gifted land.
Click here to learn how un-used or underutilized publicly-owned land can be tapped to support the development of affordable homes.
DHCD program, using federal Small Cities funds, to help fund economic development activities in eligible communities.
State and/or local taxes that are assessed on real property when ownership of the property is transferred between parties. Real estate transfer tax revenue is sometimes used to fund state or local housing trust funds.
To inject new financial resources into an older property to ensure its long-term viability. Many multifamily developments need to be recapitalized after a certain number of years to cover the costs of deferred maintenance and upgrades to bring them into conformity with current living standards. Affordable multifamily homes also need to be recapitalized periodically, but because of legal or practical limitations on permissible rents, it is difficult to support new debt for this purpose. One option for recapitalizing affordable multifamily homes is to combine tax-exempt bonds with 4 percent tax credits.
Redevelopment Authorities (121B)
State law, under Chapter 121B, permits cities and towns to set up these entities, subject to DHCD approval, to redevelop blighted or slum areas, carry out urban renewal projects and become eligible for URDG funds. While the urban renewal program no longer exists, localities can still create redevelopment authorities and apply for specific redevelopment grants.
Redevelopment Corporations (121A)
State law, under Chapter 121A, permits corporations, individuals, non-profits and local housing authorities to set up redevelopment corporations to receive an exemption from local real estate and state corporate taxes, for a specific housing or economic development project. The corporation makes a PILOT payment instead.
A discriminatory and illegal practice in which financial institutions deny mortgages and other types of financing to residents of predominantly poor or minority neighborhoods, without regard to individual creditworthiness.
Nine private, nonprofit housing agencies who administer the Section 8 program on a statewide basis, under contract with DHCD. Each agency serves a wide geographic region. Collectively, they cover the entire state and administer over 15,000 Section 8 certificates and vouchers. In addition to administering Section 8 subsidies, they administer state-funded rental assistance (MRVP) in communities without participating LHAs. They also develop affordable housing and run housing rehabilitation and weatherization programs, operate homeless shelters, run homeless prevention and first-time homebuyer programs, and technical assistance and training programs for communities.
Regional Planning Agencies (RPAs)
Public agencies that coordinate planning in each of thirteen regions of the state. They are empowered to undertake studies of resources, problems, possibilities and needs of their districts. They provide professional expertise to communities in areas such as master planning, affordable housing and open space plan, and traffic impact studies. With the exception of the Cape Cod and Nantucket Commissions, however, which are land use regulatory agencies as well as planning agencies, the RPAs serve in an advisory capacity only.
A regressive tax consumes a greater proportion of the income of lower-income individuals than of higher-income individuals. An example is the sales tax, which taxes all covered spending at the same rate, regardless of income, and therefore takes up a larger share of a lower-income consumer's overall income.
Special building codes designed to make it easier to renovate older homes, while ensuring that modern safety concerns are addressed. Click here to learn more.
The process of renovating and restoring older or deteriorating properties.
Rent Supplement (RS) Program*
See "Section 8 Existing Loan Management Set Aside"
Rental Development Action Grant (RDAL)*
A DHCD program providing operating assistance through a loan to affordable housing projects.
Rental Rehabilitation Grants*
Grants to cities and states for rental housing rehabilitation. These grants, authorized by Section 17 of the Housing Act of 1937, as amended by the Housing and Urban-Rural Recovery Act of 1983, are designed to attract private financing to rehabilitation.
Request for Proposals (RFP)
A process for soliciting applications for funding when funds are awarded competitively (an alternative to lowest-bidder competitive bidding).
Request for Qualifications (RFQ)
A process for soliciting applications for funding when funds are awarded competitively (an alternative to lowest-bidder competitive bidding).
The reserves of state or local housing finance agencies (HFAs) are funds saved through income generated in the course of their operations. Among other sources, reserves are built through fees that HFAs charge on outstanding bonds and the spreads between the cost of funds to the HFA and the rates charged to borrowers.
A provision in a land sale agreement mandating that the land will revert back to public ownership if not used in accordance with the terms of the agreement.
The process and action of reclassifying a parcel, parcels or geographic area from one zone classification to a new zone classification. Some localities have expanded the supply of housing by rezoning land from industrial use to residential use. Click here to learn more.
Rural Housing Service (RHS)
RHS, formerly Farmers' Home Administration, is part of the US Department of Agriculture. It runs a number of housing programs for people living in non-urban communities with populations of up to 20,000, providing low-cost mortgages, loan guarantees, repair and rehabilitation loans to low-income homeowners. It also has programs to build affordable rental housing and has financed over 2,000 units in Massachusetts (see Section 515).
secondary mortgage market institutions
Including, but not limited to, Fannie Mae and Freddie Mac—that purchase home mortgages from originating lenders, providing liquidity to the mortgage market. They affect the housing market by increasing the supply of funds local lenders have to lend. They also influence the types and pricing of mortgages lenders offer, and the underwriting standards they use (e.g., down payment and credit requirements, loan to value ratios, how rental income is counted in 2-4 family properties) by what they are willing to purchase.
Section 108 Loan Guarantees
A loan guarantee program within the CDBG Program under which entitlement communities may borrow up to five times their most recent annual CDBG allocations to fund additional housing rehabilitation or economic development activities.
A HUD program that finances supportive housing for the elderly through interest-free capital advances to private, nonprofit organizations. The advance does not have to be repaid as long as the housing continues to serve very low-income elderly residents for 40 years. Federal competitive grant program provides capital advances to nonprofit organizations for the construction or rehabilitation of rental housing for very low-income elderly and/or handicapped persons. Advances are interest-free and need not be repaid if housing remains available for very low-income for at least forty years.
A two-pronged federal program that helps low-income households afford privately owned rental units. Subsidies granted through the Section 8 Housing Choice Voucher program are tenant-based, meaning that they may be used to rent any unit that meets program requirements. Subsidies granted through Section 8 project-based assistance are project-based, meaning the same units remain affordable, even as tenants change. In both cases, families pay about 30 percent of their income for housing, including utilities, and the government covers the balance of costs through a subsidy.
Section 8 for Homeownership Initiative
A new program that allows rental assistance recipients to use their vouchers to qualify for a mortgage. Participants must earn a minimum of $10,300/year, work full-time, and be purchasing a single-family home.
Section 8 housing choice voucher
The largest federal rental housing assistance program, the Section 8 Housing Choice Voucher program helps eligible low-income families afford the costs of rental homes they locate on the private market. Under the program, an income-qualified household typically contributes about 30 percent of its income for housing, including utilities, and the government covers the balance of costs through a subsidy. Although it is commonly referred to as "Section 8," it is now officially called the Housing Choice Voucher Program.
Section 8 project-based assistance
Section 8 project based assistance is a federal rent subsidy program in which rent assistance is attached to specific privately-owned units. Families that live in units with Section 8 project-based assistance typically contribute about 30 percent of household income towards the monthly rent, and the administering public housing agency pays the remainder of the contracted rent directly to the landlord. When the family moves, the subsidy remains with the unit, keeping it affordable for the next family.
The minimum distance which a wall face or window is required to be from a property boundary or another window to a habitable room. It is measured as the horizontal distance between the proposed wall or window and boundary or other window.
As used by HUD in defining priorities, severe housing problems are homelessness, displacement, housing cost burden above 50% of income, occupancy of housing with serious physical problems. Data on severe housing problems drawn from the American Housing Survey measures only cost burden and physical problems.
A form of financial assistance for homeownership, in which the homebuyer must repay the original loan amount plus some percentage of the home price appreciation in lieu of interest. This approach helps to reduce the need for new subsidy monies to help future homebuyers as housing costs increase. Shared appreciation loans are often structured as a silent second mortgage that does not need to be repaid until the home is sold.
Click here for more information on shared appreciation loans and other shared equity strategies.
An approach to homeownership that balances ongoing housing affordability and individual asset accumulation. Under shared equity, a public or philanthropic entity provides funding to help a family purchase a home. In return, the entity shares in any home price appreciation that occurs while the family lives there, preserving the buying power of the subsidy in the face of rising home prices, and allowing an initial investment in homeownership to help one generation of homeowners after another. In some forms of shared equity, such as community land trusts, the public's share of appreciation stays in the home, enabling it to be sold for an affordable price. In other forms, such as shared appreciation mortgages, the public's share of appreciation is used to give a larger loan to the next homebuyer to make a home of their choice affordable.
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SHOP (Self Help Homeownership Opportunity) Program
A federal program that provides funding to national and regional nonprofit organizations that provide technical assistance to low-income homebuyers in small and rural communities. Program is a complement to the Rural Housing Service self-help (or sweat-equity) housing programs.
An important technique for making homeownership affordable while recycling public dollars, a silent second mortgage is a secondary home loan issued by a home-buying program to supplement a family's primary mortgage that does not need to be repaid until the home is resold (or in some cases, refinanced). Because no payments are due on the loan until the home is resold or refinanced, it has the same effect as a grant on housing affordability for a purchaser. But because the loan is repaid upon resale, the funds can be recycled to help the next homebuyer. When used as part of a shared equity strategy, silent second mortgages are known as shared appreciation loans.
single room occupancy (SRO)
Generally refers to housing units which are not equipped with both individual kitchen and individual bathroom facilities and which are rented for longer than 15 consecutive days. Some units may have kitchenettes and/or bathroom facilities.
A federally funded entitlement program, under which DHCD receives an annual grant (about $38 million/year) of HUD CDBG funds to support housing and community development activities in the communities which do not receive CDBG entitlement funds directly from HUD. Communities apply to DHCD for funds for specific projects.
Modification of existing state building codes to allow realistic construction requirements/costs for older buildings. New Jersey and Maryland, for instance, encourage rehabilitation by amendments that cut the costs and time of rehab work.
The term used to refer to a rapidly growing, and widespread, movement that calls for a more coordinated, environmentally sensitive approach to planning and development. A response to the problems associated with unplanned, unlimited suburban development—or sprawl—smart growth principles call for more efficient land use, compact development patterns, less dependence on the automobile, a range of housing opportunities and choices, and improved jobs/housing balance.
Use of tax and planning incentives by state and local governments to promote sustainable growth in developed areas and discourage growth in green areas. For instance, state funding is funneled to schools in dense, built areas and not provided for schools in new areas with no infrastructure.
A cost to the developer of a property that is indirect (i.e. not related to land or materials). Examples include architect and legal fees, insurance payments, and property taxes. Lengthy review and permitting processes can significantly increase development time, leading to substantial increases in a project's soft costs that reduce housing affordability.
Click here to learn how to increase housing affordability by expediting the permitting process.
The process in which the spread of development across the landscape far outpaces population growth. The landscape sprawl creates has four dimensions: 1) a population that is widely dispersed in low-density development; 2) rigidly separated homes, shops, and workplaces; 3) a network of roads marked by huge blocks and poor access; and 4) a lack of well-defined, thriving activity centers, such as downtowns and town centers. Most of the other features usually associated with sprawl -- the lack of transportation choices, relative uniformity of housing options, or the difficulty of walking -- are a result of these conditions. Families' search for affordable housing is one factor contributing to sprawl.
Subprime mortgages are made to borrowers with poor credit histories who do not qualify for prime interest rates. To compensate for the increased credit risk, subprime lenders charge a higher rate of interest.
Subsidized Housing Inventory (SHI)
This is the official list of units, by municipality, maintained by DHCD, that count toward a community’s 10% goal.
Supply-side housing policies seek to increase the supply of affordable homes. Government agencies may either add to the housing stock directly, such as by building public housing, or may provide incentives for private developers to produce more homes – for example, through the low-income housing tax credit. Efforts to reduce regulatory barriers to the development or rehabilitation of housing also operate on the supply-side of the equation; such efforts promote housing affordability by freeing the market to better respond to increases in housing demand.
Supportive housing is an overarching term that refers to an array of housing types that provide older adults with round-the-clock care in a residential setting. Supportive housing is typically referred to as assisted living, although alternative arrangements include adult foster care homes, continuing care retirement communities, and congregate housing.
The equity that is added to a property through the unpaid labor put into its improvement. A method used to help reduce the cost of a home.
As used in affordable housing, syndication refers to the raising of equity (investment capital) for low-income rental housing through the sale to outside investors of a stream of tax credits.
The reduction or elimination of property taxes, granted to owners of specific properties for a designated period of time in order to stimulate a specified public benefit. Click here to learn how tax abatements can be used to increase the availability of affordable homes.
After a developer has received an award of low-income housing tax credits, the developer will work with a syndicator to find investors to buy the credits. Those funds are then used to subsidize the costs of affordable rental homes. By matching buyers and sellers of low-income housing tax credits, syndicators play an essential role in generating equity for affordable rental homes.
tax increment financing (TIF)
A method of funding redevelopment activities that allows communities to use all, or part, of the new tax revenue generated by development in a specific area to pay the site improvements, infrastructure and other activities that enabled it to occur.
A property for which property taxes and/or municipal bills are severely past due. Click here to learn how tax-delinquent properties can be used as potential sites for the development of affordable homes.
tax-exempt private activity bonds
Private activity bonds are bonds issued by state or local governments to fund private activities that have a public benefit. The federal government provides each state with a certain amount of authority – known as bond cap – to issue tax-exempt private activity bonds for specified purposes, including homeownership, rental housing, health care, education, and manufacturing. States decide how much of their bond cap to allocate to each qualifying use. Private activity bonds are important sources of financing for affordable homes. When used to finance homeownership, they are known as mortgage revenue bonds. When used to finance qualifying rental developments, they automatically qualify a development for 4 percent low-income housing tax credits.
(Tax-Exempt Local Loans to Encourage Rental Production) A state (DHCD) program that is no longer in effect which set aside a portion of the state's tax-exempt bond volume allocation for local housing authorities (LHAs) so LHAs could provide tax-exempt mortgages to private developers of mixed income housing, with 20-40% of units set aside for low-income households.
Temporary Assistance for Needy Families (TANF)
Block grant to states
administered under the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, which established a new welfare system. The TANF
block grant replaced Aid to Families with Dependent Children (AFDC). The chief
feature of the new system is the abolition of a federal entitlement to cash
assistance.
Tenant Assistance Program (TAP)
MassHousing-funded program providing training courses and seminars for residents and property management staff in MassHousing- and HUD-assisted housing, covering topics such as substance abuse and when to intervene, cultural diversity, AIDS awareness and domestic violence.
The Life Initiative (TLI)
A private community investment fund capitalized by a consortium of eleven Massachusetts life insurance companies in 1998. TLI invests in a range of community development activities including affordable housing, channeling most (2/3) of its loans and investments through community loan funds and intermediaries.
transfer of development rights (TDR)
The conveyance of development rights by deed, easement or other legal instrument from one parcel of land to another. It is a mechanism used to encourage development in certain areas and not in others.
transit-oriented development (TOD)
Transit-oriented development is the creation of mixed-use development centered around a public transit hub (including bus rail, automobile, bicycle and pedestrian) to maximize the number of people who can utilize public transportation services to meet their daily travel needs. For more information, visit the Center for Transit-Oriented Development website.
Temporary housing for families or individuals who do not have permanent housing but require more stability than an emergency shelter.
U.S. Department of Health and Human Services (HHS)
The primary federal agency for health programs, such as Medicaid and Medicare, and public assistance/ income maintenance programs such as Temporary Assistance to Needy Families (TANF), SSI and SSDI.
U.S. Department of Housing and Urban Development (HUD)
The primary federal agency for regulating housing, including fair housing and housing finance. It is also the major federal funding source for affordable housing programs.
underwriting requirements
The tests or standards used by a lender when deciding whether to approve a loan. These may include a minimum credit score, maximum debt-to-income ratio, and other measures of a borrower's creditworthiness and the risk involved in extending a loan
Products and buildings that are accessible and usable by everyone, including people with disabilities. Universal design describes an approach to improve accessibility in the built environment through products and environments designed to be usable by all people without the need for adaptation. Within a residential setting, examples of universal design features include lower countertops and wide doorways for people in wheelchairs, lever faucets and door handles, and roll-in showers with handheld adjustable shower heads.
urban growth boundary (UGB)
A locally designated boundary for projected growth that restricts zoning and services inside the boundary. Inner city neighborhoods are often found within UGBs, which may in turn help concentrate resources inside growth neighborhoods.
Urban Renewal Development Grants (URDG)
A state funded DHCD program providing grants to redevelopment authorities for specific redevelopment projects (residential, commercial, industrial, educational, recreational, medical or governmental). Localities pay 100% of the cost initially and the state uses state and federal funds to repay them for 50% of the cost in 20-year installments.
A property that has no occupants. Often these properties are also in severe disrepair.
Exceptions to zoning laws granted by municipalities in accordance with the provisions of state zoning enabling laws.
The number of miles that residential vehicles are driven each day. When housing is located far from employment centers and public transit, vehicle miles traveled generally increase, along with environmental pollutants.
Click here to read more about the relationship between housing and transportation.
very-low-income household
Income below 50% of metropolitan area median, as defined by HUD, for its own programmatic purposes. In 1995, 41% of renter households and 18% of owner households were very low-income according to American Housing Survey data.
Visitability is a concept formalized in 1987 by the advocacy group Concrete Change and is based on the principle that all new homes should include basic features that make them accessible to people regardless of their physical abilities. A visitable home has a main level that is easy for both residents and guests to enter and exit with ease. The three key accessibility features include: at least one zero-step entrance; wide interior doors; and a half-bathroom on the main level of a home.
A government payment to, or on behalf of, a household, to be used solely to pay a portion of the household’s housing costs.
In general, a weak market is one in which the number of sellers is greater than the number of buyers. In the housing context, weak-market cities may have falling or depressed home values and, in some cases, property abandonment.
Whole-house approach to improving the energy efficiency of an existing home. In the whole-house approach, all the energy-impacting systems in the home are examined and improved upon simultaneously, as needed.
Workforce housing is housing for the occupations needed in every community, including teachers, nurses, police officers, fire fighters and many other critical workers. Click here to learn more.
worst case housing problems
Unsubsidized very low-income renter households with severe housing problems. HUD is required to submit an annual report to Congress on worst case housing problems.
