Quasi-Public CEDAC Has Helped Finance 455K Homes
The Community Economic Development Assistance Corporation, or CEDAC, was created by the Massachusetts Legislature nearly 50 years ago, to expend public money on technical assistance for community development corporations and other organizations in economically distressed target areas.
CEDAC’s mission was later expanded to provide both financing and technical assistance to eligible organizations committed to preserving and creating affordable housing for low- and moderate-income individuals. CEDAC’s affiliate, the Children’s Investment Fund, is engaged in improving early childhood education and out-of-school program facilities for children from low- and moderate-income families.
CEDAC can be described as a quasi-governmental corporation that invests in nonprofit organizations committed to promoting a better quality of life for individuals and families overlooked by the free-market economy.
Source of Pre-Development Funds
Under CEDAC’s enabling legislation, only “eligible organizations” can qualify for its technical and financial assistance. Eligible organizations are defined to include CDCs and nonprofits committed to improving economic well-being of target areas, stabilizing and expanding employment and investment in those areas and preserving and creating affordable housing.
CEDAC provides those organizations with bridge pre-development and acquisition financing to support their projects before they close on construction financing. Its programs are also directed toward creation of supportive housing for elders, veterans, homeless individuals and families and disabled persons, as well as preservation of affordable housing units whose affordability limitations are scheduled to expire.
Working on behalf of the Massachusetts Executive Office of Housing and Livable Communities, CEDAC also administers several sources of “patient” financing – that is, permanent loans with distant maturity dates, typically at 0 percent interest.
To obtain such financing, eligible organizations are expected to commit to long term affordability restrictions benefiting low- and moderate-income individuals. Some sources also have specific requirements to serve individuals with disabilities, homeless households or other vulnerable populations, while offering supportive services
The results of CEDAC’s efforts are noteworthy. Its financing and technical assistance programs have contributed to the production or preservation of over 455,000 dwelling units in Massachusetts.
Works on Behalf of State
For a typical CEDAC predevelopment or acquisition loan structure, CEDAC can provide an acquisition loan for up to 100 percent of appraised value, with predevelopment financing to cover other soft costs. These loans often have a two- or three-year term.
CEDAC’s permanent financing sources involve various forms of supportive housing, and must be awarded by EOHLC, usually in one of the several competitive funding rounds held annually.
Permanent loans are non-interest bearing, and in most cases are for 30-year terms without periodic principal payments. In exchange for these benefits, nonprofits agree to sign and record an affordable housing restriction on their properties with a 30-year term.
In consultation with EOHLC, CEDAC is also willing to extend loan maturity dates beyond the initial 30-year term, as long as the nonprofit continues to comply with program requirements. On behalf of EOHLC, CEDAC has overseen the financing of over 22,000 supportive housing units.
CEDAC’s affordable housing restriction requires nonprofit developers to lease residential units only to lower-income or disabled individuals. Social service programs must be maintained for residents of supportive housing. Units are made available through a marketing plan acceptable to CEDAC, and CEDAC is involved in assuring that residents are income qualified for the affordable and supportive units.
EOHLC reserves a right of first refusal to purchase the property if the nonprofit wants to sell it later. EOHLC also reserves an option to purchase the property at its then-current appraised value when the affordable housing restriction expires. CEDAC will subordinate its mortgage to institutional lenders that agree to honor EOHLC’s rights under the affordable housing restriction.
CEDAC’s most recent annual report, published as of the end of 2024, shows impressive results.
59 Projects in One Year
During that year alone, CEDAC loaned or granted, including participations, over $44 million in financial assistance on 59 projects with 2,315 dwelling units. Its affiliate, Children’s Investment Fund, also made available another $2 million for childcare projects.
CEDAC’s role in preserving and creating affordable and supportive housing is expected to grow over the next few years, in part because of the Affordable Homes Act of 2024.
The AHA authorized the state treasurer to issue up to $5.16 billion in bonds to finance government funding for housing projects. Much of the authorized funds will be distributed through EOHLC, which, in turn, will rely on CEDAC and other quasi-public corporations to administer funding for qualified projects.
With a proven record of accomplishments, and financial support through the AHA, CEDAC is poised for continued success in 2026.
Download the article as seen in Banker & Tradesman on November 24, 2025. Learn more about Christopher R. Vaccaro.
