The town of Oak Bluffs this week received a $443,654 state grant to convert the old town library at the corner of Circuit and Pennacook avenues into a mixed-use building with three rental units of affordable housing.

“Working people of Massachusetts need more affordable housing opportunities,” said Gov. Deval Patrick, in a prepared statement about the grant. “I commend the town for its creative plan to redevelop their old library so it can once again be of service to the commonwealth and the residents of Oak Bluffs.”

The grant comes from the Housing Development Support Program which is administered by the state Department of Housing and Community Development. The housing development support program is a component of the federally funded Community Development Block Grant program.

The town will use the money to rehabilitate the 80-year old, two-story, wood-framed building. Plans call for commercial space on the ground floor and three units of affordable housing; a two-bedroom unit will be located on the first floor and a one-bedroom unit and efficiency apartment will be located on the second floor.

The building will be deed-restricted in perpetuity, providing long-term affordable rental housing for low and moderate income households. The town will retain ownership of the building but will execute a long-term lease and management contract with the Dukes County Regional Housing Authority.

Ronald DiOrio, chairman of the Oak Bluffs selectmen and the town affordable housing committee, praised several town officials for their exhaustive work in putting together the grant application, including town administrator Michael Dutton, highway superintendent Richard Combra Jr., building inspector Jerry Weiner and grant writer Alice Boyd.

“The amount of work that went into this was overwhelming. Getting this money was a long shot, but thanks to the outstanding work of some dedicated town employees [the money] has become a reality,” Mr. DiOrio said.

He said the town will draft a request for proposals; a number of pharmacists have expressed interest about moving into the commercial space.

“For many years people [on the Vineyard] have simply torn down historical buildings and put up new buildings to fill a need. This plan will actually return this building to what it looked like at the turn of the [19th] century, while providing a spark to this part of town,” Mr. DiOrio said.

At a special town meeting in December, town voters approved $176,000 in Community Preservation Act (CPA) funds to renovate the old building.