Vermont Housing Finance Agency (VHFA) announced it received $7.5 million for housing through a federal award and a generous philanthropic donation. Together, these awards will support the development or preservation of over 300 affordable rental homes, as well as establishing an innovative pilot project to support smaller-scale community housing projects. The recent awards demonstrate how investments from philanthropic donors can help attract new federal funding to meet Vermont’s housing needs.
“We have got to do all we can to address our housing crisis so that all Vermonters have a safe and permanently affordable place to call home. This includes putting federal funding to work as creatively, quickly, and effectively as possible – and I am pleased VHFA is doing just that with these funds,” said Senator Bernie Sanders.
VHFA received a $4.5 million award from the Capital Magnet Fund, a housing and community development financing program of the U.S. Treasury, which seeks to leverage joint public and private investments. VHFA is one of only 52 organizations nationwide to receive an award from the competitive program this year, and this marks VHFA’s second CMF award in two years. VHFA has already committed most of its previous $4 million award to nine housing projects, which include 341 affordable homes.
Vermont’s congressional delegation has long been a strong advocate for federal housing programs.
“Vermont has one of the lowest vacancy rates in the nation, a crisis rooted in limited housing supply. The Vermont delegation has been proud to lend our support for VHFA’s work and for the Capital Magnet Fund program to support crucial community housing projects and meet their goals,” said Senator Peter Welch. “We will continue to advocate for new and existing funding for affordable housing for Vermont.”
These awards represent VHFA’s continued efforts to bring together new resources for community development through the Vermont Housing Investment Fund (VHIF). The fund was created in 2020 to provide more flexible financing opportunities for affordable housing development. The cost to build a new apartment in Vermont has increased by over 76% since 2018. VHIF’s ability to fill gaps in project budgets has been vital to allow much-needed housing projects to move forward despite complex and changing development conditions.
“I was lucky…I found housing in my own town at a time when I really needed it. I wanted to stay independent and stay in South Hero,” said Marion Leakey, a resident of Bayview Crossing, a housing development for older Vermonters which received a VHIF loan. “I really like it here, and my home became available to a family who needed it.”
The Vermont Housing Investment Fund has secured nearly $16 million in grants and loans from the Federal Home Loan Bank (FHLB) of Boston, New England Federal Credit Union (NEFCU), the Vermont Community Foundation (VCF) and VHFA’s own reserves. These cornerstone local and regional investors recognized the potential of private capital to more effectively leverage scarce public housing resources.
"Now, more than ever, we need innovative and collaborative ways to tap into much needed federal funding,” said Representative Becca Balint. “Building affordable homes has to be a priority to alleviate burdens on Vermont families and strengthen our workforce and communities.”
The fund is invested as revolving loans to housing developers, including predevelopment loans, short-term loans to bridge financing or to allow for preservation-focused acquisitions, and low-interest long-term loans. To date, the fund has supported the development or preservation of 834 apartments in 17 developments statewide. Eighty of these homes will support Vermonters exiting homelessness.
“Vermont’s shortage of safe and affordable housing has been made even more dire due to this summer’s historic floods,” noted NEFCU CEO John J. Dwyer, Jr. “We have been proud to invest in effective and sustainable strategies to support the Vermont communities that NEFCU serves.”
VHFA also received the exciting news that it had been selected by anonymous Vermont donors to receive a generous $3 million grant for affordable housing. $1.5 million from the award will be invested in the Vermont Housing Investment Fund as permanently revolving low-interest loans to housing projects.
“We wanted to be a part of a permanent strategy to address poverty and homelessness. Vermont’s housing crisis affects us all, and we wanted to be a part of the solution,” said a representative from the foundation.
The other $1.5 million will be invested in a Community Housing Accelerator pilot project, through which VHFA will support smaller, village-scale developments. The initiative will prioritize workforce housing projects led by small, emerging, and BIPOC developers. VHFA will announce more details about this project in the coming months.
“This grant from a Vermont family foundation will allow VHFA to continue to attract new funding and sustain assistance to communities that need it most,” said VHFA’s Executive Director Maura Collins. “We are grateful that so many generous organizations and individuals have joined us in our efforts, and we encourage more donors and investors to consider making a difference though our housing fund.”
Pictured: Bayview Crossing in South Hero. Courtesy of Cathedral Square Corporation/Photography by Sally McCay