Note: Projects may receive more than one type of loan.
Acquisition, rehab, construction and construction/permanent loans
made by VHFA are primarily made in conjunction with the allocation
of federal housing tax credits. Most projects are funded through
the issuance of tax-exempt bonds but also require public or private
funding sources as well. VHFA has the responsibility to underwrite
projects to be sure the projects are properly built within budgeted
constraints, completed within the stated time frame, meet affordability
covenants. VHFA's underwriting analysis looks beyond compliance
with program rules and target marketing. An in depth review is done
of the underlying project assumptions, need for the project, demand
for the project, acquisition and rehab/construction costs and long
term financial viability. VHFA has established underwriting standards
which are intended to balance credit risk to maintain a high bond
rating, while providing the flexibility needed to meet a wide diversity
of projects, and yet meet the needs of bond investors to make capital
investment in Vermont attractive.
VHFA worked in conjunction with VHCB and DHCA to develop and implement
a common application format that is used be each of the funding
agencies on all requests for funding. The funds these organizations
administer represent the lion's share of capital funding for
affordable housing in Vermont. A common application should aid developers
in quicker preparation time and should help the funding agencies
in coordinating their reviews. This effort will also assist in allowing
for electronic application processes.
VHFA's Vermont Housing Ventures
program provides loans to non-profit developers to assist them with
predevelopment expenses that help determine project feasibility
in the early stages of a new project. VHFA has provided 204 predevelopment
loans since 1988 totaling over $5.8 million dollars. The Vermont
Housing Ventures revolving loan fund gives non-profit housing organizations
with limited resources the ability to conduct preliminary engineering
and valuation studies to determine project feasibility at a nominal
rate. In all but a very few instances, these projects have gone
forward to become a reality. Ventures loans are repaid to VHFA when
these projects receive construction and/or permanent funding. Repaid
loan proceeds are then recycled to new projects.
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