Affordable housing is the target of Citizens initiative
Citizens Bank has unveiled an initiative aimed at helping to tackle the New England region’s shortage of affordable housing.
Called the Citizens Housing Bank, the program will provide $200 million in loan funds at a low interest rate to non-profit housing developers in New Hampshire, Massachusetts, Rhode Island and Connecticut.
Under the program, new community development loans will be offered to non-profit developers at the fixed interest rate of 3 percent for three years with a 25-year amortization.
“The Citizens Housing Bank is unique because it provides an interest rate approximately 50 percent below market for short-term construction loans and at the same time, locks in permanent financing,” said Thomas Metzger, president and chief executive officer of Citizens Bank New Hampshire.
Metzger said the program addresses two concerns. One is to meet “a critical need to provide real, affordable housing in New Hampshire that has prompted many to leave our region for more affordable areas.” The other is that, by helping to solve the affordable housing problem, “we know it will help solve the region’s jobs problems.”
The Citizens Housing Bank will have two components: an affordable housing loan program and the Citizens Bank Housing Heroes Award program.
The award program will recognize “housing heroes,” presenting a $50,000 grant to a successful project that has created more affordable housing in each of the four states. The award will be available to any non-profit developer who has completed an affordable housing project in the past year. Any interested non-profit developer can apply for the award. The award will look for projects that have innovative solutions to increasing affordable housing, the bank said.
Southwestern Community Services in Keene will be the first non-profit housing developer to receive funds from this program.
The interest construction loan will allow Southwestern Community Services to build 40 apartments in Keene for the working poor and their families, said Executive Director Bill Marcello.
According to the Marcello, the 3 percent financing from Citizens is a real boon to the Keene project and will allow his group to include sidewalks, a larger playground and a protected bus stop as part of the development.
Linda Tremblay, vice president of Citizens Bank New Hampshire, said several other applications are in the pipeline and include a mix of affordable housing for families and low-income elderly.
According to a study by the National Low-Income Housing Coalition, workers in New Hampshire need to earn at least $16.49 per hour – or 320 percent of the minimum wage — to afford the average two-bedroom apartment in the state. The median price of a home now stands at $200,000 — a 60 percent increase in five years.
In greater Boston, median housing costs have jumped 184 percent in the past five years, from about $186,000 in 1998 to about $343,000 in 2003.