Multifamily loan programs

Loans on multifamily housing projects are made directly by VHFA staff to community-based or statewide nonprofit agencies or organizations and private for-profit developers who are committed to creating and preserving housing to low and moderate income Vermonters. Since 1977, VHFA has assisted about 285 projects representing about 7,400 units.

In fiscal year 2007, VHFA provided loans and tax credits for 31 housing projects. The agency provided $25.9 million in a combination of predevelopment, construction, and permanent financing to 29 housing projects containing 754 units. Loan production during fiscal year ending June 30, 2006 in each of our multifamily loan programs is as follows:

FY2007	Short-term construction	Permanent loan	Rehab loan	Ventures loan
No. of loans	10	8	5	15
No. of units supported w/loans	208	187	74	406
Dollar volume	$20.545,000	$4,297,000	$425,000	$681.250

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.