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.