Conventional Home Loan Program



VHFA's Conventional Home Loan Program offers home buyers a fixed, low-rate, 30-year term with a minimum cash contribution.

With VHFA there's no rate lock-in fee, delivery fee or additional fees based on your credit eligibility or property type.

While the rate for a VHFA loan will be the same regardless of the participating lender, the fees a lender will charge for originating and closing the loan will differ.

Only VHFA borrowers are exempt from the Vermont Property Transfer Tax on the first $110,000 of the purchase price; which can save you up to $625.

Mortgage insurance is required if the downpayment is less than 20%. Your lender will determine which mortgage insurer best fits your needs. The Program Detail Requirements of a mortgage insurer may differ from what VHFA allows.

Program details

  • 30-year loan term.
  • Up to 97% maximum loan amount (3% minimum down payment).
  • 620 minimum credit score.
  • A second mortgage from an eligible non-profit lender is allowed.
  • No borrower cash contribution or reserves required for 1-unit properties; 3% borrower contribution for 2-unit.
  • Pre-purchase education must be completed by at least one borrower. Your lender will direct you to the acceptable options.
  • Sellers may contribute up to 3% for a 90% or greater LTV, and up to 6% if the LTV is less than 90%.
  • Eligible property: New and existing 1-unit properties, planned unit developments and condominiums determined eligible by your lender. Existing 2-unit properties.
  • Properties that are perpetually affordable due to shared equity from a community land trust are eligible. Visit NeighborWorks® HomeOwnership Centers of Vermont for details.

Eligibility requirements*

  • If purchasing in Addison, Bennington, Chittenden, Grand Isle or Windsor counties, all borrowers must not have had an ownership interest in a principal residence in the past three years. This requirement does not apply to veterans who've served within the last 25 years or in Burlington's Census Tract 4.
  • The income of all borrowers (and spouse) must be within the VHFA Income Limit in effect at the time of application
  • All borrowers must take occupancy of the property within 60 days after closing and continue to occupy for the life of the loan
  • The purchase price of the property must be within the VHFA Purchase Price Limit in effect at the time of application and not include more than 15 acres. 2-unit properties must have been occupied as a residence for the previous five (5) years.
  • All borrowers must not have an ownership interest in other real estate at the time of purchase, with limited exceptions. If you own other property, your lender will determine your eligibility.

*Includes a spouse that is not applying for the loan

Interest rates

3.875%

(3.895% APR)
Fixed rate w/0.25 discount point(s)

how to apply for a vhfa loan. click to learn more.

VHFA doesn't pre-qualify borrowers or take applications. Here's how the application process works:

  1. Review the list of VHFA Participating Lenders to find a lender in your area.
  2. Contact the lender of your choice. We provide contact information for each participating lender.
  3. Review VHFA's program requirements with your lender to determine your eligibility.
  4. Complete the loan application with your lender, providing all required documentation.

Your lender will take care of nearly everything:

  • Processing your application
  • Requesting a property appraisal
  • Obtaining all needed approvals
  • Working with your closing agent to close your loan
  • Submitting all required documents to VHFA and other parties, as applicable

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Federal Recapture Tax

Federal Recapture is a requirement of VHFA's source of funds. Only borrowers that meet specific criteria are subject to the tax.

However, VHFA will reimburse borrowers that close their VHFA home loan after February 1, 2006 for any tax they are required to pay.

The tax only applies if you sell your home in the first nine years, you realize a net gain on the sale and your income in the year you sell exceeds a limit that increases each year. Your lender will provide you with further details.