Chapter 40B and the NEF

Also known as the Comprehensive Permit Law, Massachusetts Chapter 40B was enacted in 1969 to help address the statewide shortage of affordable housing by reducing barriers created by local approval processes, local zoning regulations, and other restrictions. The statute enables local zoning boards of appeals to approve an affordable-housing development under more flexible rules if at least 25 percent of its units will be "affordable" and have long-term affordability restrictions.

In 1999, the state's Housing Appeals Committee (HAC) added the Federal Home Loan Bank of Boston's New England Fund (NEF) to the list of financing mechanisms that may qualify a development for consideration under Chapter 40B. The HAC defined the NEF as one of several "federally subsidizing sources" available for 40B developments. State law requires that such a funding source be used by developers to ensure a development's compliance with 40B.

In instances when a member financial institution of the Federal Home Loan Bank of Boston plans to finance a 40B development using the NEF, the developer must first obtain written determination of project eligibility (a site-approval or project-eligibility letter) from the state-approved Project Administrator, MassHousing.

Upon receipt of a site-approval or project-eligibility letter, the developer should submit a copy to the member, which will then determine whether it will provide preliminary approval to fund the development using a NEF advance. The developer can then apply to the local zoning board of appeals for a comprehensive zoning permit.

FHLBank Boston/MassHousing 40B Webinar

Play Webinar | View Slides

This presentation assists members in navigating the NEF and other financing options for 40B developments with an overview of the 40B process in conjunction with the Federal Home Loan Bank of Boston's NEF program and MassHousing’s role as administrator. The presentation also includes a brief description of the Massachusetts Housing Choice Initiative and MassHousing’s mortgage insurance products.

Chapter 40R and the NEF

In 2004, Massachusetts approved the Smart Growth and Housing Production program, known as Chapter 40R. This measure enables municipalities to create special districts with increased density provided that at least 20 percent of the units are for households earning at or below 80 percent of the area median income. NEF funding can now be used to fund eligible developments under Chapter 40R.

Visit the DHCD web site for guidelines for housing programs in which funding is provided through a non-governmental entity.

Rhode Island Comprehensive Permit and the NEF
In 2004, Rhode Island passed a Comprehensive Permit measure designed to increase the supply of affordable housing in communities across the state. In response to this development, the Bank has established an additional eligibility track for the use of New England Fund (NEF) advances.

Members can now request NEF funding from the Bank for a development financed under Rhode Island's Comprehensive Permit law, which is similar to Massachusetts' 40B. The Rhode Island law sets a 20 percent affordability threshold for units affordable to households earning at or below 80 percent of the area median income. For more information, see the Rhode Island Housing web site.

Technical Assistance

If you have questions regarding the use of the NEF, please contact Kenneth A.Willis, vice president / director of housing and community investment 617-292-9631; or Paulette Vass 617-292-9792.