In December, the Federal Home Loan Bank of Boston awarded $6.7 million in grants and subsidies for advances during the second funding round of its 2002 Affordable Housing Program (AHP). The awards will fund 25 initiatives that will create or preserve 414 affordable units.

As housing costs escalate at unprecedented rates, the AHP continues to provide options for the most needy residents of the New England states. "Even in this era of rising costs, 72 percent of the approved units will serve very low-income households," says John T. Eller, first vice president / housing and community investment at the Bank.

Round Two was also noteworthy for the success of its ownership applications, which made up 47 percent of the total units funded.

Chittenden Trust Company proved that persistence in applying for AHP funding pays off. After applying unsuccessfully for AHP grants in the past, the Vermont member had two applications recommended for awards this round. Chittenden Trust won a $300,000 AHP grant to help fund the Homeland Homeownership Program ? Very Low-Income Initiative and a $311,000 grant and $500,000 advance to help fund the Preservation of Whitcomb Woods initiative.

"Chittenden was tenacious," says Liz Nickerson, the Bank's senior community investment manager for Vermont and New Hampshire. "As members become more experienced, they become more skilled at knowing what initiatives have the greatest chance of being funded."

Collaborating with sponsor Waterfront Historic Area League of New Bedford, Inc., member Compass Bank for Savings won a $307,709 AHP grant and a $1.45 million advance to help fund the acquisition and rehabilitation of three city-owned historic properties to create a mixed-income, mixed-use development downtown. The development will include five units for very low-income residents, six for moderate-income households, seven market-rate units, support services, and ground-floor retail space.

"This initiative relied on strong city planning to focus on downtown revitalization," says Mr. Noell. "You have to marvel at the level of city participation."

Another initiative involving significant municipal participation is the Boxborough Condominium Exchange Program. The program will provide down-payment and closing-cost assistance to 16 very low- to moderate-income first-time home buyers. The buyers will purchase condominiums in Boxborough, Massachusetts. Submitted by member Community National Bank, the application won a $200,000 AHP grant.

"The town realized it had an opportunity," says Mr. Noell. "Almost half of the town's housing stock is condominiums, and they chose to address the shortage of affordable housing."

Providing for the Homeless
"There is a tremendous need for housing for the homeless," notes Carmen Gutierrez-Seales, the Bank's senior community investment manager for Maine and Massachusetts' North Shore. "Three of the projects approved in my area are serving the homeless in some way."

Ms. Gutierrez-Seales also observes a growing collaboration between nonprofits and municipalities to develop strategies to increase the supply of affordable housing in Massachusetts cities such as Lawrence and Haverhill.

One example is the YWCA of Greater Lawrence's Haverhill Street Transitional/Permanent Housing initiative, which won a $169,634 grant and a $1,050,000 advance to provide 20 rental units of transitional and permanent housing and services for women, teen mothers, and women with children. Member Lawrence Savings Bank will provide a construction loan and permanent mortgage funding, while the city of Lawrence will provide HOME funds. The initiative is part of the city's Consolidated Plan to improve the central city.

Social-Service Providers Look to Housing
As housing costs expand and the economy remains sluggish, affordable-housing developers are mounting increasingly complex strategies to piece together the funding necessary to make these initiatives happen.

"The complexity of the projects seems to be increasing because of limited resources," notes Ken Willis, the Bank's senior community investment manager for metro Boston, Massachusetts' South Shore, and Rhode Island.

"We're also seeing the more traditional supportive services reinventing themselves as housing providers."

"Many social-service providers are dealing with the realities of the population they serve on a daily basis," adds Mr. Eller. "The lack of affordable housing is one of the problems they confront."