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VHFA’s down payment assistance program funded by Union Bank

Posted by: Leslie Black-Plumeau on 7/28/2017

This morning Union Bank funded nearly $600,000 of Vermont Housing Finance Agency’s (VHFA) highly successful “ASSIST” down payment assistance program. By purchasing Vermont Affordable Housing Credits for the past three years, Union Bank has helped nearly 500 Vermont households buy their first homes.

Interested buyers who qualify for a VHFA mortgage can receive up to $5,000 in the form of a no-interest second mortgage to help with down payment and closing costs.  The down payment assistance requires no monthly payments, with repayment to VHFA due only when the home is sold or refinanced.  VHFA uses repayments to continue funding the program for future homebuyers.

Faced with increasing home prices in many parts of the state, more and more home buyers are turning to the ASSIST program for help. Demand for the program is more than twice the initial projections.  

Union Bank’s purchase of this year’s state housing credits will provide an additional $593,750 of funding for the program.  VHFA is currently seeking additional funding sources to keep up with the unexpectedly high demand for the program because evidence shows first-time home buyers are critically important to improving the Vermont economy. The Lake Champlain Chamber of Commerce championed the creation of this program based on their members’ need for more housing assistance to attract and retain workers.

Since its enactment by the Vermont Legislature in 2015, this program has helped nearly 500 Vermont households with an average income of $65,000 to buy their first homes. Vermonters using the program tend to be young, with an average age of 31.

“This is an example of the great impact a public-private partnership can have on the first-time home buyer market in Vermont,” remarked VHFA’s Executive Director, Sarah Carpenter.  “We are proud to work with Union Bank to remove the roadblock created by rising home prices and the substantial down payment and fees required at closing for Vermonters who are otherwise ready to become homeowners.“ 

“We are delighted to help address the ever-growing demand among Vermonters for down payment assistance,” commented Karyn Hale, Union Bank’s Senior Vice President, Treasurer and Chief Financial Officer.   

The ASSIST program is funded through a temporary expansion of the Vermont Affordable Housing Credit program, passed by the state legislature in 2015. 

Union Bank purchased all available credits for the first three years of the program. VHFA will be seeking investors to purchase future credits in July 2018 when the program enters its fourth year.