Single-family and homeownership mortgage
financing programs

VHFA provides homeownership financing by purchasing loans from 35 participating lenders around the state. Participating lenders include banks, credit unions and mortgage companies. Homeownership opportunities and education are further enhanced through VHFA's financial support of and involvement with five NeighborWorks® HomeOwnership Centers located around the State. VHFA was instrumental in the start up and provides ongoing funding of the Centers. VHFA provided $346,500 for operating funds to HomeOwnership Centers in fiscal year 2006.

Since 1974, VHFA has made about 26,000 loans to Vermonters purchasing primary residences. The current portfolio of single family loans is 5,423 with a loan balance of approximately $504 million. In fiscal year2007, 87% of loans made by VHFA were made to households at or below 100% of median income and 57% of its borrowers were at or below 80% of median income. VHFA's typical borrower has an average household income of$48,000, borrowed an average loan amount of $144,000 and purchased homes with an average purchase price of almost$159,000. Comparatively, the average purchase price of homes in Vermont, based on transfer tax returns for 2006, was $229,388.

Downpayment assistance

VHFA created a new Cash Assistance Option within our single-family loan programs in 2000. Under this option, VHFA provides borrowers with up to 3 percent of the mortgage amount requested in cash available to assist them with down payment or closing costs. This program constitutes 14 percent of VHFA's most recent loan volume.

VHFA also provides down payment and closing cost assistance using interest earned on Real Estate Trust Accounts. VHFA has made in excess of $101,514 available to homebuyers through this program this fiscal year alone.

Predevelopment and construction loans for homeownership development

VHFA created a Homeownership Predevelopment Loan Program providing upwards of $1.3 million as a revolving loan fund. This pilot program is intended to foster the construction of single-family affordable housing units that are available for sale by providing working capital at low cost to eligible housing developers quickly and flexibly.

The Homeownership Construction Loan Program was developed by VHFA to increase the supply of affordable housing in communities in Vermont where a shortage of such housing exists. Financing is available for site acquisition, infrastructure development, as well as construction of individual housing units.

In FY 2007, VHFA provided 10 loans through these programs totaling $12.8 million to support the construction of 170 affordable owner homes.

New mortgage initiatives

VHFA has also made significant changes to existing programs that allow more qualified households to purchase a home and to make it easier for lenders to work with VHFA's programs.

• To encourage the development of new housing, VHFA announced special financing for new homes in developments that meet smart growth characteristics. Financing for buyers is available at 4.75%, fixed for 30 years. A total of $10 million in financing is available statewide.
• For borrowers with high credit scores, VHFA now allows lenders to use traditional automatic underwriting programs — such as Fannie Mae's Desktop Underwriter and Freddie Mac's Loan Prospector — on VHFA loans.
• VHFA expanded the production side of VHFA.net. Lenders can now manage their files, track approvals and monitor production totals. VHFA also changed our process for lenders so they can sell loans to VHFA with repair or rehabilitation escrows.

Other homeownership activities

• Shared appreciation mortgages through nonprofits to ensure long-term housing affordability.
• Borrowers purchasing a home financed by VHFA receive benefits from the State by an exemption from the State Property Transfer Tax on the first $100,000 of their purchase price.