Capital stack and soft money — Massachusetts

A dozen state programs, one OneStop application, three different underwriters

Every EOHLC-administered gap source below is requested inside the same OneStop application that carries the federal and state Low Income Housing Tax Credit request — sponsors do not file separately for AHTF, HSF, HIF, FCF, or CBH, and EOHLC's own guidance states plainly that a sponsor seeking any of these resources "must simultaneously identify and apply for" them alongside the tax credit request, because EOHLC "typically will not accept applications for additional resources at a later date" once a competition is underway. What differs behind the single portal is who actually reviews and services each source. AHTF is administered by MassHousing on EOHLC's behalf, including loan servicing and cash-flow-sharing certifications after closing. HIF, FCF, and CBH are underwritten and asset-managed by CEDAC as EOHLC's technical-assistance partner — a nonprofit intermediary, not a state agency, doing the feasibility review before EOHLC issues an award. HSF and TOD are reviewed directly by EOHLC's own Division of Housing Development.

Two eligibility rules are easy to miss because they cut against the instinct to apply for everything. HIF is, by regulation, a nonprofit-controlled resource: eligible borrowers are nonprofit corporations organized under M.G.L. c.180, limited-equity cooperatives under c.157B, single-purpose owner corporations controlled by a nonprofit, or joint ventures at least 51% nonprofit-owned — a for-profit sponsor cannot access it directly. And EOHLC's own NOFA text states that sponsors seeking HIF "may not apply for tax credits during this competition unless they intend to provide homeless units in conjunction with significant supportive services" — HIF is pitched as an alternative to a tax-credit deal for most projects, not an automatic layer under one.

The capital stack is scored, not just tallied — Financial Feasibility is 20 of the QAP's 186 points

Unlike states that treat leverage as purely a discretionary or unscored factor, EOHLC's Qualified Allocation Plan makes Financial Feasibility one of five "Fundamental Project Characteristics" categories, worth 20 of the 186 total competitive points, with the same 12-point floor every fundamental category carries (detailed further in this library's Phase 8 guide). The OneStop application must show "solid evidence of financing commitments from construction and permanent lenders and from other sources required for project financial feasibility," a comprehensive letter of interest from an acceptable syndicator or investor, and documentation that any non-EOHLC junior debt — the AHTF, HSF, HIF, FCF, or CBH sources above, plus any private subordinate debt — is actually in place, not merely contemplated. A capital stack assembled late or left thin at application does not just risk a financing gap later; it can cost points at the threshold review stage itself.

A related threshold, separate from the scored Financial Feasibility category, requires "Identification of All Financing Sources" for every source in the stack, even where a firm commitment isn't yet possible — EOHLC will accept a strong letter of interest in place of an executed commitment at application, but states it "will place particular emphasis on the letters from syndicators and investors" during 2025–2026 specifically, a tightening relative to prior cycles worth flagging to a sponsor assembling the package.

The Massachusetts state Housing Tax Credit: $60 million a year, in lieu of federal credit, on a 5-year claim

Since 2001 EOHLC has paired a state income/excise tax credit with the federal credit under M.G.L. c.23B §3, M.G.L. c.62 §6I (personal income tax), and M.G.L. c.63 §31H (corporate excise), implemented through 760 CMR 54.00. The annual authority has grown from an original $10 million through $20 million and a temporary $40 million; in October 2023 Governor Healey signed a tax relief bill permanently setting the ceiling at $60 million a year, which the 2025–2026 QAP states EOHLC "expects to fully allocate ... each calendar year."

The state credit is not additive on top of a project's full federal ask — EOHLC's QAP states the state credit "typically will be allocated in lieu of a portion of federal credit which the project might otherwise receive," and during 2025–2026 EOHLC also reserves the right to cap each sponsor at one state-credit award per competition. Per the most recent (2027 Winter) competition guidance, typical per-project state credit requests run $400,000 for projects of 40 or fewer units, $700,000 for 41–60 units, $1,000,000 for 61–99 units, and $1,500,000 for 100 or more units, with EOHLC encouraging requests in the $10,000–$12,000-per-unit range; the QAP's own base text lists slightly higher figures ($500,000 / $800,000 / $1,000,000 / $1,500,000), a reminder that NOFA-cycle guidance can move ahead of the QAP's own printed numbers between amendments.

EOHLC also expects a real net-raise test on the state credit, not just the federal one: sponsors are told to plan on raising "at least 80¢ per state credit dollar," and both the state and federal net raises must be acceptable to EOHLC before an award is finalized.

MassHousing's own subordinate debt: real money, aimed at a shallower affordability band than a standard 9%/4% deal

MassHousing originates two subordinate-debt products directly, separate from the EOHLC-administered funds above, and both are pitched at mixed-income production rather than the deep, 60%-average-AMI affordability a competitive 9% or preservation 4% deal typically carries. MassHousing BILD ("Bringing Innovation to Lending and Development") pairs a taxable FORGE Loan — up to a 10-year term on a 40-year amortization, up to 80% LTV at a 1.25x DSCR, originated with Freddie Mac — with Momentum Equity, MassHousing's own preferred-equity product that can fund up to 25% of a development's total equity, coterminous with the senior loan. Both require at least 50 total units and only 20% of units restricted to ≤80% AMI, and both are structured as eligible subsidized financing sources under Chapter 40B. MassHousing's separate Workforce Housing fund — more than $100 million invested to date — provides up to $100,000 of subsidy per unit for housing at ≤120% AMI, again with only 20% of units required at ≤80% AMI.

Neither BILD nor Workforce Housing requires the deep, near-universal affordability of a standard competitive LIHTC deal — both are built for a lighter mixed-income mix and compete with, rather than automatically stack under, a 60%-average-AMI 9%/4% transaction. A sponsor assuming either is simply another line of AHTF-style gap financing for a conventional LIHTC deal is applying a Chapter 40B-oriented mixed-income product to a deeper-affordability deal it wasn't built for.

Property tax: no blanket LIHTC exemption — a 2023 local-option statute and a pre-LIHTC urban-redevelopment relic

Massachusetts has no property-tax exemption written specifically around LIHTC status the way some states' affordable-housing exemptions are. What exists instead is M.G.L. c.59, §5O, effective for tax years beginning January 1, 2023 — a local-option partial exemption for Class One residential rental property that a city or town must affirmatively "accept" by vote of its legislative body (filed with the Department of Revenue's Division of Local Services, and revocable the same way). Where adopted, the exemption applies to units rented at an affordable rate to households at or below an income ceiling the municipality itself sets, not to exceed 200% of area median income, and it is calculated proportionally: the tax otherwise due on the parcel, multiplied by the affordable units' share of the building's total square footage. It is not a full abatement, and it is not available anywhere a municipality has not adopted it — this research did not confirm how many, or which, Massachusetts municipalities have accepted §5O as of this writing, and that adoption status should be checked directly with a project's host municipality and DOR's Division of Local Services before it is assumed available.

Separately, M.G.L. c.121A — the state's decades-old urban redevelopment corporation statute, predating the federal LIHTC program by decades — allows an approved "121A Corporation" to receive an exemption from ordinary property taxation in exchange for an annual excise-in-lieu-of-taxes payment negotiated under the statute (Section 10). Some Massachusetts cities, Boston among them, maintain active 121A tax agreements, including on affordable and mixed-income housing. Whether, and how, a standard investor-LP/nonprofit- or for-profit-GP LIHTC ownership entity organizes to qualify for c.121A status — as opposed to a purpose-built c.121A corporation of the kind the statute was originally written around — was not confirmed in this research and should be verified with the host municipality's assessing office and with counsel before it is relied on in a pro forma; it is a materially different question from the nonprofit-GP charitable-purpose exemptions this library has documented in other states.

The Community Investment Tax Credit: real, but not a project-level capital-stack source

The Community Investment Tax Credit (CITC), created by St. 2012, c.238 and codified at M.G.L. c.62, §6M (with a corporate-excise counterpart under c.63), lets an individual or corporate donor claim a state tax credit — historically 50 cents on the dollar — for a cash contribution to a certified Community Development Corporation's own Community Investment Plan, administered under 760 CMR 68.00 by the same agency that runs the LIHTC program (DHCD at CITC's creation, now EOHLC). It is a real and, per advocacy groups, oversubscribed program, but it funds a CDC's own operating and community-investment capacity as a "community partner" — it is not a source that gets entered as project debt or equity in a specific LIHTC deal's sources and uses, the way AHTF or HIF dollars are. A CDC sponsor's overall capacity to originate and staff a LIHTC deal can benefit indirectly from CITC-raised funds; the tax credit itself does not appear on that deal's own capital stack.

CITC's own statutory sunset, per St. 2018, c.99 §25, was set at December 31, 2025, with an annual statewide cap of $12 million for tax years 2023 through 2025. Whether the credit has been extended beyond that date could not be confirmed from the Commonwealth's own most recent published tax-expenditure budget, which as of this research still cited the 2025 sunset without noting an extension — advocacy organizations were actively pushing for an extension and expansion as of the most recent legislative session found. Its current status should be verified directly against DOR guidance or the Legislature's own session laws before it is counted on for any project timed near or after that date.