[Tools & Resources]

FCF Basics Explained

By now, you may have heard the news about MA DDS changes to reimbursements for capital leases: as of October 1, 2019, all development costs will be included in the occupancy rate calculation as long as the capital lease company applies for and is awarded a Facilities Consolidation Loan Program (FCF) loan.

You can read more about those changes here, but if you’re wondering what in the world FCF is – we are here to help with some of the basics.

What is FCF?

The Facilities Consolidation Fund (FCF) is a loan program administered by Community Economic Development Assistance Corporation (CEDAC) on behalf of the Massachusetts Department of Housing and Community Development (DHCD) that finances up to 50% of the total development cost for housing developed for clients of the Massachusetts Department of Mental Health (DMH) or the Massachusetts Department of Developmental Services (DDS).

Basically, FCF provides permanent, deferred payment loans for 30-year terms at 0% interest for projects that meet the program statute, regulations, and guidelines.

FCF History

FCF was created by the Massachusetts legislature in 1993 to provide capital financing for the development of community-based housing for clients of DMH and DDS. Originally FCF was established as a $50 Million Loan Fund, but it is now reauthorized every five years through the state’s housing bond bill. CIL has been incorporating FCF into our MA group home developments since the mid-90's to move the last individuals out of Belchertown State School, as well as the Dever School in Tauton.

What Kind of Housing is Eligible?

The goal for all housing applying for FCF must be to provide non-institutional settings which respond to the needs and desires of individuals being served. The housing must house individuals eligible for services through DMH or DDS, to which either DMH or DDS (depending on the population being housed) must certify. Specific examples of FCF-eligible housing types include:

  • Group homes (typically 4-5 bedrooms)
  • Units within larger developments in which DMH or DDS consumers are integrated

Housing applying for FCF also must meet specific design guidelines, and those guidelines are dependent on which State agency is certifying the development. For developments housing DDS clients, the Program Design and Cost Guide for Community Residences applies. For development housing DMH clients, the FCF program does not have specific design guidelines, but there may be other design requirements if additional capital or operating sources are being requested.

Why Apply for FCF?

Under the new guidelines, MA DDS will include all development costs in the occupancy rate calculation for homes that apply for and are awarded FCF. This enables service providers to take advantage of CIL's financing, while CIL handles the application process and ensures that homes meet the applicable program and design requirements. Additionally, once FCF funds are received, the service provider's lease payments are decreased proportionately. 

Want to know more about FCF and working with CIL? We’d welcome the chance to talk with you. If you’d like more information on the FCF program, please contact CEDAC at (617) 727-5944.

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