Government Guaranteed Home Loan Program



Government Guaranteed Home Loans from VHFA offer our low-fixed rates combined with the low-down payment and less stringent credit requirements of the government guaranteed loan programs listed below:

Since the down payment and credit requirements vary for each of these agencies, please go to the web sites below for details on each program, or contact a participating lender. The government program offered by each lender is listed after each lender name.

  • RD — USDA Rural Development (www.rurdev.usda.gov/vt)
    • No downpayment required and guarantee fee can be financed
    • 1-unit properties only
    • Certain areas of Chittenden County are not eligible. Go to the RD Web site or contact a participating lender.
  • VA — Veterans Administration (www.va.gov)
    • No downpayment required for eligible borrowers
    • Veterans who served in the past 25 years do not have to be first-time homebuyers
  • FHA — Federal Housing Administration (www.hud.gov)
    • Low downpayment requirements
    • Part of the mortgage insurance premium may be included in the mortgage loan for eligible borrowers

With VHFA there is no rate lock-in fee or fees based on your credit or property type. And 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 $625.00.

Program details below apply to all government programs offered by VHFA.

Program details

  • 30-year loan term
  • Minimum credit score of 620
  • Seller contributions allowed based on requirements of applicable agency
  • Downpayment requirements determined by the applicable agency. See above.
  • Income of all borrowers must be within the limit of the applicable government agency and VHFA's limit. Contact your lender.
  • Eligible property: Purchase price must be within the limit of the applicable agency and VHFA's limit. New and existing 1-unit properties, Planned Unit Developments and Condominiums determined eligible by your lender. 2-unit properties must be allowed by the applicable government agency and have been occupied as a residence for the previous five (5) years.

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

4.375%

(4.375% APR)
Fixed rate with 0 discount point(s)

discount points might be tax-deductible. click to learn more.

You might be able to deduct discounts points from your taxes in the year you pay them — or over the life of your loan — if you meet certain conditions outlined by the IRS.

VHFA doesn't provide tax advice. Contact your tax-preparer or visit the IRS for details.

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4 simple steps to a vhfa mortgage. 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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Payment calculator

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.