Provincetown apartment project at former VFW got a $9 million boost this month. What now?

An affordable housing complex planned for the former VFW property at 3 Jerome Smith Road in Provincetown won funding from the Massachusetts Department of Housing and Community Development on its first try.

On Thursday, Gov. Maura Healey's office announced that 27 projects across Massachusetts will receive $246 million in federal and state low-income housing tax credits and direct subsidies. The support will be used to build and preserve 1,597 affordable homes throughout Massachusetts.

"Getting this approval in the first round helps make the project get to fruition a lot sooner, which is fabulous," said Provincetown Select Board member Leslie Sandberg. "We're having a housing crisis here and having a project be greenlighted will be very helpful. As soon as it's built, people will be getting in there."

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The Chapter 40B Provincetown project will receive federal and state low-income housing tax credits and over $9 million in soft debt from housing programs, including American Rescue Plan money, according to the town. Soft debt is a loan with no or below market rate interest. The milestone means the project is clear to close, with an eye towards starting construction in spring next year, according to developer The Community Builders.

Along with the Provincetown project, three other housing projects on the Cape and Islands also won funding.

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What will housing at the former Provincetown VFW look like?

The multi-family redevelopment will feature 61 affordable units and four market-rate units in four three-story buildings, with a mix of studio apartments and one-, two- and three-bedroom units, all-electric heating and cooling and solar-ready roofs.

Assistant Town Manager Dan Riviello said it was "really an honor and not something that happens very often" to be awarded funding in the first round, calling it proof of The Community Builders' strong application.

The project includes rental units at 30% area median income (AMI), 60% AMI, workforce units at 80% AMI, and four market-rate units.

A decision on workforce housing may have helped win funding in the first round.

Originally the workforce units were open to those with 80% to 120% AMI, but the Select Board voted in January to cap those apartments at 80% AMI as recommended by The Community Builders. Capping those units at 80% AMI allowed for them to be counted as low-income housing tax credit units and garner significant additional federal subsidy.

Allowing for more access to federal money subsequently reduces the amount the state would kick in to a level that is more likely to win funding without increasing Provincetown's local contribution, said Lindsey Gael, senior development project manager at The Community Builders, during that January meeting.

"Their recommendation was a good one. We passed on the first round," said Sandberg.

When the new police station is completed on Route 6, the current 26 Shank Painter Road station will be used for housing planned to be open to those at 80% to 120% AMI, said Sandberg.

"We know we need to focus on attainable housing for all income levels," said Sandberg.

Four of the units will also be designated as Community Based Housing units for people with disabilities.

Provincetown will contribute $3.5 million.

Town meeting in April approved funding to cover the town's hefty financial commitment to the development.

Voters backed $2.25 million to go towards the project, transferring $1.65 million from excess funds within the town's tourism fund and $600,000 from free cash. Combined with $750,000 from the Affordable Housing Trust Fund approved by the Community Housing Council and $500,000 of Community Preservation Act money, the total contribution from the town stands at $3.5 million.

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Additionally, Truro contributed $100,000 from its Community Preservation Act money.

"On the Outer Cape, we realize housing is a regional issue and the towns are supporting each other in their efforts," said Sandberg.

Work is underway to connect the upcoming project to the municipal sewer, said Riviello.

"We're bringing sewer to the site to make sure we're prepared for when TCB is ready for shovels," said Riviello.

Cape Cod housing projects in Orleans, Sandwich and Edgartown also won funding.

A new construction project in Orleans at 107 Main St. also won funding. Proposed by the Housing Assistance Corporation in partnership with Orleans, the Chapter 40B project will feature 14 new affordable units for individuals and/or families. It would redevelop a blighted building, formerly the location of a Masonic Lodge built in 1971, into new units.

Other local projects include the Henry T. Wing School Residences development in Sandwich which will include 38 new affordable units for seniors in its first phase. Meshacket Commons in Edgartown, with 36 total units when completed, including 32 affordable rental units and four ownership units, received $6 million in state and federal money.

Zane Razzaq writes about housing and real estate. Reach her at zrazzaq@capecodonline.com. Follow her on Twitter @zanerazz.

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This article originally appeared on Cape Cod Times: Provincetown housing on Jerome Smith Road wins federal, state money