Chapter 40B and the NEF
Also known as the Comprehensive Permit Law, Massachusetts
Chapter 40B was enacted in 1969 to help address the
statewide shortage of affordable housing by reducing
barriers created by local approval processes, local
zoning regulations, and other restrictions. The
statute enables local zoning boards of appeals to approve
an affordable-housing development under more flexible
rules if at least 25 percent of its units will be "affordable"
and have long-term affordability restrictions.
In 1999, the state's Housing Appeals Committee (HAC)
added the Federal Home Loan Bank of Boston's New England
Fund (NEF) to the list of financing mechanisms that
may qualify a development for consideration under Chapter
40B. The HAC defined the NEF as one of several "federally
subsidizing sources" available for 40B developments.
State law requires that such a funding source be used
by developers to ensure a development's compliance with
In instances when a member financial institution of
the Federal Home Loan Bank of Boston plans to finance
a 40B development using the NEF, the developer must
first obtain written determination of project eligibility
(a site-approval or project-eligibility letter) from
the state-approved Project Administrator, MassHousing.
Upon receipt of a site-approval or project-eligibility
letter, the developer should submit a copy to the member,
which will then determine whether it will provide preliminary
approval to fund the development using a NEF advance.
The developer can then apply to the local zoning board
of appeals for a comprehensive zoning permit.
Chapter 40R and the NEF
In 2004, Massachusetts approved the Smart Growth and
Housing Production program, known as Chapter 40R. This
measure enables municipalities to create special districts
with increased density provided that at least 20 percent
of the units are for households earning at or below
80 percent of the area median income. NEF funding can
now be used to fund eligible developments under Chapter
Visit the DHCD
web site for guidelines for housing programs in
which funding is provided through a non-governmental
Rhode Island Comprehensive Permit and the NEF
In 2004, Rhode Island passed a Comprehensive Permit
measure designed to increase the supply of affordable
housing in communities across the state. In response
to this development, the Bank has established an additional
eligibility track for the use of New England Fund (NEF)
Members can now request NEF funding from the Bank for
a development financed under Rhode Island's Comprehensive
Permit law, which is similar to Massachusetts' 40B.
The Rhode Island law sets a 20 percent affordability
threshold for units affordable to households earning
at or below 80 percent of the area median income. For
more information, see the Rhode
Island Housing web site.
If you have questions regarding the use of the NEF,
please contact Kenneth A.Willis, vice president
/ director of housing and community investment
or Paulette Vass