Boston Acquisition Fund (BAF)

Created in 2024, the Boston Acquisition Fund (BAF) is a public-private revolving loan fund established by the City of Boston in partnership with Boston institutions and philanthropies. The program is administered by Massachusetts Housing Investment Corporation (MHIC), a community development financial institution (CDFI) that was founded in 1993 by a consortium of banks to fill a critical gap in meeting the credit needs of affordable housing developers.

Boston Acquisition Fund’s primary objective to acquire and preserve rental units that are currently renting at below market rates. The program provides 100% financing for acquisitions, with below-market interest rates to reduce carrying costs, fast and streamlined underwriting for quicker closings, and flexible terms to aid affordability planning. Products include senior debt, up to $20 million with up to a 20-year term, or subordinate debt, up to $5 million, with a 3-10 year term.

The Boston Acquisition Fund has a financial goal of raising $25 million, with approximately $13 million already secured as of 2024. The City of Boston has committed $5 million in grant funding, and an additional $8 million has been committed by Mass General Brigham, Barr Foundation, The Boston Foundation, Boston Children’s Hospital, Dana-Farber Cancer Institute, Boston Medical Center, Beth Israel Deaconess Medical Center, Massachusetts Housing Investment Corporation (MHIC), Eastern Bank Foundation, and Tufts Medicine.

The program builds upon the success of the City’s Acquisition Opportunity Program (AOP), which enables developers to pre-qualify with the City of Boston for a set amount of funding to compete on the private market to acquire rental housing to preserve affordability. AOP has already secured over 1,000 units of affordable housing since its launch.