On April 11, 1974, then Governor Thomas Salmon signed legislation creating the Vermont Housing Finance Agency (VHFA). As the years progressed, and Vermont’s housing landscape and community needs changed, VHFA’s programs evolved.
Fast forward fifty years to January 9, 2025, when Governor Phil Scott gave his annual address to the Legislature and emphasized housing as one of the state’s greatest immediate needs - if not the greatest. In fact, according to the most recent Vermont Housing Needs Assessment, Vermont requires 24,000-36,000 new homes by 2030 in order to meet the need. It’s an ambitious goal, but one VHFA is poised to support through innovative financial partnerships and programs.
Over the years, VHFA has remained nimble, adapting from a fledgling agency in the 1970s, to a well-respected financial partner in the 21st century. The agency continues to provide tax credits and other incentives to develop and rehabilitate affordable homes, works with lenders to provide low-interest loans and down payment assistance for low- and moderate-income homebuyers, and offers free homebuyer education classes, energy incentives, and more.
In its first decade (1974-1984), VHFA set a course to become one of the most innovative and dependable financial partners for developers and homebuyers in the state. Some of its early accomplishments include:
- 1974 - VHFA issued $14 million in single-family bonds for about 600 mortgages to Vermont home buyers.
- 1977 - VHFA issued its first multifamily bond totaling more than $13 million providing long-term financing for 445 apartments.
- 1978 – VHFA, along with two lenders, delivered the agency’s first home improvement loans committing $450,000 to the program.
- 1979 - VHFA committed $2 million for energy conservation loans for 1,500 households.
- 1980 - VHFA initiated a graduated mortgage payment program that allowed borrowers smaller monthly payments in the initial years of their loan.
- 1984 - VHFA initiated financing “mixed” income multifamily housing development and small-scale rehabilitation programs for existing properties.
The Agency’s growth over the next two decades was hastened in 1986 when the Low-Income Housing Tax Credit (LITHTC) program was established by Congress. This was the start of VHFA's history of awarding developers beneficial tax credits to create more diversified housing – a vital part of affordable housing development to this day. Other important advancements during this period include:
- 1985 - VHFA financed its first Level III Community Care Home in Enosburg Falls, helping to fill a need for more affordable senior housing.
- 1987 - VHFA developed Mortgage Credit Certificate and Low-Income Housing Tax Credit programs; and helped establish Energy Rated Homes of Vermont, a system to help homebuyers ease high energy costs.
- 1988 - VHFA piloted the down payment assistance program for homebuyers; and founded Housing Vermont to translate federal low-income housing tax credits into equity for housing development.
- 1990-1991 – VHFA financed the rehabilitation and construction of two large rental communities - the 336-unit Northgate Apartment complex in Burlington and Officer’s Row at Fort Ethan Allen in Colchester, preserving these multifamily affordable properties for low-income Vermonters.
- 1992 - VHFA piloted a down payment assistance program at the behest of the Legislature, allowing 150 100% loans to be made each year for three years.
As the new millennium unfolded, VHFA’s reputation as an innovative source of financing solutions for affordable housing was established. The National Council of State Housing Agencies awarded VHFA the Homeownership Department Award for program excellence for its housing choice voucher initiative – a groundbreaking program that helped Vermonters use federal Housing Choice Vouchers, normally used for rental housing, to purchase homes. Embracing its place as a housing finance leader, VHFA partnered with UVM’s Center for Rural Studies to launch www.housingdata.org, the largest single source for housing data in Vermont.
Other accomplishments during the early 2000s include:
- 2005 – VHFA streamlined the mortgage underwriting process by implementing “delegated underwriting,” for its largest lenders.
- 2007 – VHFA issued its first multipurpose bond indenture for both home purchase mortgages and multifamily rental housing development.
- 2008 – Federal funding through the Housing Assistance Rehabilitation Program (HARP) allowed VHFA to purchase and rehabilitate foreclosed homes and resell them to qualified low- and moderate-income homebuyers.
In 2011, Hurricane Irene hit Vermont hard. In response to the urgent need of Vermonters who lost their homes, VHFA helped create an award-winning program that provided down payment assistance to income-eligible residents impacted by the storm. In 2020, the COVID-19 pandemic ushered in a period of uncertainty for many Vermonters. Again, VHFA demonstrated its ability to adapt by launching the Vermont Homeowner Assistance Program which provided $41 million in federal funds to help 5,800+ homeowners remain housed during the pandemic. In addition to helping homeowners pay overdue mortgages, property taxes, and utility bills, VHFA also launched the Vermont Housing Investment Fund (HIVE) to leverage essential funds for affordable housing.
The Agency has gained tremendous momentum over its five decades and its ability to create and sustain affordable housing options will undoubtedly have a ripple effect on Vermont's future. As Governor Scott said in his annual address in January, “Housing is key, and it’s something we can do right now. So, let’s work together and get more families in homes faster, and at a cost they can afford.” VHFA couldn’t agree more and is poised to help that happen.
For more stories about VHFA’s history, diverse financial programs, and future development, visit www.vhfa.org, Facebook, LinkedIn, and subscribe to the VHFA Newsfeed.
PHOTO: Homes on Officer's Row at Fort Ethan Allen in Colchester, VT., an affordable multifamily rehabilitation project financed by VHFA in 1990-1992.