The Massachusetts Housing Investment Corp. (MHIC) has closed on a $7.8 million equity investment that will be used to transform a historic mill into 40 units of affordable rental housing in Leominster.

The historic "Whitney Building," built in 1893 and listed on the National Register of Historic Places, will be redeveloped by Twin Cities Community Development Corp., a Fitchburg-based nonprofit focused on economic and affordable housing development.

The Whitney Building project involves the adaptive reuse of the mill building, which occupies a 1.45 acre parcel of land on Water and Whitney Streets. The renovation will create a mix of one-, two-, three- and four-bedroom units, in addition to a management office, community and program space, a play area and parking, according to a statement.

All units will be affordable to households at or below 60 percent of the area median income (AMI). Eight units -subsidized by Section 8 project-based vouchers – will be available to households at or below 30 percent AMI. 

The equity investment will be used to purchase federal low-income housing tax credits and federal historic tax credits, and was made by two investors: $6.96 million from a MHIC multi-investor fund and $880,000 from Avidia Bank. Other financing sources include the state Department of Housing and Community Development; the Fitchburg-Leominster HOME consortium; state historic tax credit and brownfields tax credit equity; Neighborworks America and HUD EDI grants; and energy rebates.

Davis Square Architects is the architect for the project, and Dellbrook Construction is the contractor. Construction has already begun and, according to Dellbrook, there are about 100 to 120 workers on the site daily. The project is expected to be completed in October 2012.