Vermont Housing Finance Agency (VHFA) is pleased to announce the launch of the VHFA Housing Investment Fund with Vermont Community Foundation (VCF) as its founding investor. This will be initiated with a VCF investment of $1.5 million for a pre-development program and a long-term loan program made to developers of affordable rental housing. VHFA is working to expand the fund with investments from other community partners to grow its impact.
“This new investment platform will innovatively leverage multiple funding sources and target assistance to communities that need it most,” remarked Vermont Housing Finance Agency Executive Director Maura Collins. “VHFA shares these goals with the Vermont Community Foundation, and we are thrilled that they have joined the fund as its first investor.”
The Vermont Community Foundation has long worked to support local initiatives, including previous investments in VHFA-supported multi-family housing. The low rates provided by the Foundation have enabled VHFA to pass on lower rates to developers, which helps keep rents affordable for low and moderate income renters.
“We are excited to deepen our partnership with VHFA as the founding investor in the housing investment fund,” said Vermont Community Foundation Senior Philanthropic Advisor Chelsea Bardot Lewis. “This is the largest investment that we have made since the inception of our Vermont Investment Pool in 2001, and it represents our commitment to significantly increasing access to affordable housing in our state.”
The VHFA Housing Investment Fund will initially focus on the development and preservation of affordable rental housing, consisting of both short-term pre-development loans and much needed long-term fixed-rate 20- to 30-year permanent loans for projects. $500,000 in revolving pre-development loans will free up capital for affordable housing development and help projects in their critical early stages. Examples of uses for pre-development include appraisals, market studies, legal consultations, building design and environmental tests. These uses can be essential for determining the feasibility of a project, as well as ensuring that developers are in the best possible position to apply for other funding sources. The pre-development loan program will help make worthwhile yet complex projects possible.
VCF’s investment will also allow VHFA to provide developments with low-interest permanent debt for 20-30 years, helping a project remain affordable and sustainable over time. VHFA will use $1 million of VCF’s investment to leverage an estimated $25 million in various funding sources, creating 100 to 200 new homes.
In awarding these resources, VHFA will be looking for projects that serve multiple policy goals, including downtown redevelopment, historical preservation, sustainable growth, support for local businesses, energy efficiency, and serving the most vulnerable Vermonters.
This investment fund is more important than ever as Vermont begins its recovery from the coronavirus pandemic. Affordable housing will assist the Vermonters most likely to be impacted, as well as serving as a cornerstone for rebuilding local economies.
Pictured: Great River Terrace in Brattleboro. The affordable housing development received an acquisition bridge loan funded through a previous investment by the Vermont Community Foundation.