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Boston uses federal funds to beef up homeownership programs

The funds will be partially dedicated to developing vacant city-owned lots into houses that can be purchased at affordable rates.

Row houses at 29 Oak Street in Boston's Chinatown are photographed on July 21, 2021.Erin Clark/Globe Staff

A few years ago, the parcel of land in Mattapan where Mayor Michelle Wu stood on Friday was vacant, blighted by years of neglect. Today, it’s a nearly-finished home that will be dedicated to deed-restricted affordable housing, helped along with some city funding.

It’s the kind of investment in homeownership that city officials have long hoped to promote on a broader scale as a way of combatting the housing crisis and preventing displacement as rents rise.

Wu said Friday that her administration will direct $60 million in federal American Rescue Plan Act funds to programs aimed at lowering the barriers to homeownership. Turning vacant city-owned lots into houses that can be purchased at affordable rates by low- and middle-income residents will be at the front of the effort.


“Housing has to be the foundation of a healthy thriving city,” said Wu. “In Boston that is an urgent issue. It cuts across every neighborhood, every generation, every demographic. We are really trying to move as fast as possible with every single lever that the city has.”

Early next year, developers will be able to submit proposals for 70 of 150 city-owned parcels that the Boston Planning and Development Agency has identified as suitable for development. Once plans are approved, the city will subsidize construction in order to sell the homes at a lower price to moderate-income households, a rare opportunity for families earning below the area median income to purchase a home in one of the most expensive real estate markets in the country. In total, Wu said the effort would create about 300 new housing units.

The rest of the funding will be directed to programs that help first-time homebuyers clear other major hurdles like down payments, closing costs, and mortgages. Money will go to the Boston Home Center’s downpayment and closing cost assistance program, which offers income-qualified buyers grants of up to five percent of the purchase price on a home, not exceeding $50,000. Wu estimated the ARPA funds will help around 650 low- and moderate-income households with downpayment assistance.


There’s money, too, for the matched-savings program STASH, which will offer first-generation homebuyers a 10-1 match on $2,000 in savings toward a home in Boston.

And it will help the Boston Housing Authority launch a new homeownership program offering public housing and Section 8 voucher residents up to $75,000 in assistance on homes purchased in the city. In some cases, Wu said, that will make buying a home more financially feasible for public housing residents than renting.

“We always have a pool of families in that 50 to 70 percent of area median income range where homeownership could be possible with the right support... and it makes total sense for us to try to help them,” said BHA administrator Kate Bennett. “For every family at BHA that graduates to homeownership, we’re freeing up subsidy for the next rental family on the waitlist.”

It’s a big investment that could put a small dent in the city’s housing shortage, Wu said, but it is only possible because of a one-time influx of federal funds. Far more is needed at the local and state level to combat the housing crisis, she said.

“We are using every single dollar of the American Rescue Plan and every federal recovery source, but this is a one time infusion, and we need to have sustainable revenue sources [to fund housing initiatives] going forward.”


Tiana Woodard of the Globe staff contributed to this report.

Andrew Brinker can be reached at Follow him @andrewnbrinker.