Predevelopment Funding

Technical Assistance, Predevelopment and Acquisition Financing

The early stages of planning a project require pre-development money: funds to pay for the tasks that need to be completed before construction can begin. The first step for a developer is to create a development team with the expertise to carry out the preliminary architectural and engineering work, determine if a site is suitable for development, assess the market, secure a site, test financial feasibility, and apply for funding. Several state and quasi-public agencies offer funding and professional expertise for planning, technical assistance, and pre-development activities:

Local Community Preservation Act (CPA) funds can be used in certain circumstances
Federal block grants (communities receiving funding from HUD as Community Development Block Grant or HOME entitlement communities, or HOME consortium members)
Housing trust funds capitalized with CPA funds or other sources, such as developer payments under inclusionary zoning or negotiated agreements

Typically, pre-development funding is repaid if a project is developed but forgiven if the project does not move forward.

Sources for Technical Assistance and Pre-Development

DHCD's Office of Sustainable Communities and the Massachusetts Housing Partnership (MHP) can provide guidance to communities in the early stages of planning for housing development.
MHP's Community Assistance team works with communities, local partnerships, and developers anywhere in the state. Its resources can be accessed at any step in the planning and implementation process. MHP provides funding for both technical assistance and pre-development activities to pay for architects, engineers, and development consultants. MHP’s team can also provide direct technical assistance through staff time, and help you access other resources in other state agencies as appropriate, including MassDevelopment, the Massachusetts Historical Commission and the Community Economic Development Assistance Corporation (CEDAC).
CEDAC Seed Funding and Technical Assistance — (CEDAC) is a quasi-public state agency created to provide technical assistance and pre-development funding for nonprofit, community-based development organizations, limited equity cooperatives, and public agencies. It can help communities working with qualified nonprofits. CEDAC also offers help with expiring use projects—privately owned, subsidized rental units at risk of losing affordability status due to expiring use restrictions. CEDAC maintains a list of affordable housing developments by date of expiration of the subsidy and can assist in developing a preservation strategy.
MassDevelopment, also a quasi-public state agency, is the first agency to call if you think a site might be contaminated, as it offers grants for brownfield site assessment and remediation in many communities. It also offers pre-development loans and permanent financing for affordable rental housing.
Historic properties may be eligible for pre-development matching grants from the Massachusetts Preservation Projects Fund (MPPF), administered by the Massachusetts Historical Commission. The fund provides matching grants to protect and support future development of properties listed in the Register of Historic Places. Applicants must be municipalities or nonprofit organizations.

Massachusetts Communities using Predevelopment Resources

Many successful projects in Massachusetts have used one or several pre-development resources in the course of development and implementation. These resources are useful for a range of locations and activities both in high-growth, high-cost suburban communities and in older urban neighborhoods.

In recent years, more and more communities have used Community Preservation Act funds for planning, technical assistance, and pre-development activities. See the Community Preservation Coalition's Projects Database for a rundown of local communities that have put this resource to work to support affordable housing initiatives.