The Melrose Y has obtained financing from MassDevelopment to issue a tax-free $5 million bond for the purchase of a childcare facility it previously leased in Stoneham.

The bond will finance renovations to the Stoneham location at 39 Pleasant Street, as well as the construction of new classrooms at the Melrose YMCA Childcare Center at 106 Main St. in Melrose, said Diana Brennan, executive director.

The Melrose Y has been renting the Stoneham facility for 10 years, and the bank refinancing is funding the purchase at reduced interest rates. The Stoneham facility offers child care services to more than 100 infants and children.

"It's really exciting for us, to own a facility we had been renting," Brennan said. "This is an important financial move for us."

The Melrose Y will also use bond proceeds to refinance a previous bond and conventional bank loans.

The $5 million bond purchased by NorthernBank comes without federal taxes, through the tax-exempt status of MassDevelopment, a quasi-government agency that supports economic development in Massachusetts.

A press release from MassDevelopment said that the Melrose Y currently provides child care for more than 600 infants to school-age children, with waiting lists of almost 50 children for each age group. The project is expected to create 12 jobs, and Northern Bank & Trust Company purchased the bond.

"This low-cost financing will help fill a much-needed role in the Melrose community: reaching those who need reliable child care," said MassDevelopment President and CEO Robert L. Culver in the release "The Melrose Family Y plays an important role in fostering a healthy caring community through its fitness classes, awareness programs, and care and teaching for children. This renovation will allow the Y to open its programs to more people."