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VHFA News

By: Zach Nelson on 8/7/2020

VHFA offers loan programs through local participating lenders to help people bridge the gap and afford to buy a home in Vermont. Getting a pre-approval from a lender is the first step in the process. Here are answers to the top 5 questions homebuyers have about pre-approvals.       

  1. What is a pre-approval?

A pre-approval is a letter from a lender stating that they are tentatively willing to lend you a specified amount of money so you can buy a home. Lenders base their pre-approval decision on a limited look at your personal financial health. A pre-approval helps you understand your estimated price range. However, to fully understand the costs of buying a home, you should ask the lender to clarify:

  • Estimated monthly house payment,
  • Estimated closing costs and down payment,
  • Loan purchase price and geographic restrictions, and
  • How much you could afford given different housing types and locations.
  1. When should you get I pre-approval?

Real estate agents and sellers want to work with buyers who are ready, willing, and able to purchase. Therefore, it is best to contact a lender and get a pre-approval before you start seriously shopping. A pre-approval letter shows that you are prepared, and that you will likely have the financial power to complete the purchase when the time comes.

  1. How does pre-approval affect my credit score?

A lender will issue a pre-approval only after reviewing your credit report. When a lender reviews your credit report to make a lending decision it is called a “hard pull” and it may affect your credit score. If you contact a few different lenders to compare rates, closing costs and customer service, limit additional hard pulls to within 30 days of the first hard pull so that only one is counted on your credit score.*

Different loans have different credit requirements. For VHFA credit requirements, contact a VHFA participating lender.

  1. How long is a pre-approval good?

One common misconception is that buyers must find a home before their pre-approval expires. This is not true. Pre-approvals are good for up to 60-90 days. However, if very little has changed regarding your income, savings, employment, and credit, you may renew your pre-approval simply by contacting your lender and asking for an update. Many buyers will not renew their pre-approval until they find a home they are interested in.

To ensure you remain pre-approved, it is very important to not make any changes to your financial situation without contacting your lender to understand how it will impact your pre-approval status. Consult with your lender and your real estate agent to determine the best time to renew your pre-approval. 

  1. What should I do before contacting a lender?

When it comes to personal finances, it pays to be organized. To speed up the pre-approval process, organize your financial documents before contacting a lender. If your documents are well-organized and readily available, lenders will appreciate it, and they will be able to help you in a timely manner.

Lenders generally base their decision to issue a pre-approval on the following factors:

  • Your current rent or mortgage payment,
  • How much you can afford to pay each month (gross monthly income and monthly debt payments),
  • How much you can afford for closing costs and a down payment (savings, investments, etc.),
  • Whether your income is likely to continue (employment history), and
  • How well you handle credit (credit score and history).

Here is a list of documents to gather before you contact a lender to ask for a pre-approval.  Your lender may request others so be sure to provide them with all of the information they request:

  • Pay stubs for the past 30 days
  • 2 most recent bank statements with all pages for all accounts
  • 2 years of federal tax returns with all schedules, W2s and 1099s.
  • 2 most recent investment and retirement statements
  • Driver’s license or other official identification

Interested in VHFA? Contact a VHFA participating lender to ask for a pre-approval.

All VHFA mortgage programs are offered through local Vermont-based participating lenders. Click here if you are interested in finding a VHFA participating lender.

Questions about VHFA or the homebuying process? We are happy to help! Call (800) 652-3400 or email VHFAhomeownershp@vhfa.org to contact a VHFA staff member that can answer your questions.

*For more information go to https://www.myfico.com/credit-education/credit-reports/credit-checks-and-inquiries. Last visited on August 4, 2020. 

By: Mia Watson on 7/31/2020

This commentary by VHFA Executive Director Maura Collins appeared recently in VTDigger

On July 16, the Vermont Housing Finance Agency (VHFA) joined the Racial Justice Alliance, the Mayor of Burlington, and over 30 corporations and organizations from the region in declaring racism as a public health emergency.

VHFA is a partner in this effort because not only do the statistics in the City’s declaration deeply disturb us, but as a housing finance entity we must acknowledge the long and deep role that our industry has played in making racism systematic.

Only 4% of Burlington’s Black households own their home, and that dismal rate is barring too many from the largest source of wealth for middle class Americans, which is home equity. Paying a fixed amount over decades can make not only one’s housing affordable but the stability in cost can free up money for other things such as health care, childcare, higher education, and more. After years of paying that stable, affordable cost of a home, wealth accumulates as households slowly gain equity both by paying down what they owe and as their home grows in value. 

That system and source of wealth is what Black and Brown households were denied almost since the system began. Throughout the US, including here in this region, there was a building boom after World War II, during which Black and Brown households were largely excluded from homeownership opportunities through racist practices like redlining. That was followed by several decades of home price appreciation that we will likely never replicate.

And it is that wealth — that home equity — that white households like mine tapped into to send children like me to college. It is what was used to move up to nicer and bigger homes near more opportunities. It was shared with their grown children as they looked to buy a home, and ultimately it is passed on as an inheritance for future generations. The access to wealth through housing is unmatched and that wealth leads to better health, longer lives, and better educational and job prospects. For many Black and Brown families, there is no way to make up for that time lost and all the wealth created over those years. 

But the reason for hope comes from action. We have seen action before sparked by the killing of black men. The Fair Housing Act, part of the Civil Rights Act of 1968, was signed a week after Dr. Martin Luther King, Jr. was assassinated. And it was that Act that finally made overt housing discrimination illegal.

And yet, the problems continue, not just here but widely ... systematically. In Vermont, the homeownership rate for Black households today is just 21%, lower than it was when the Fair Housing Act was signed. That’s right: lower. 

I thank the Mayor and the City Council for working with the Racial Justice Alliance and inviting us all to action. A spark was ignited by George Floyd’s death and we all watched that spark become a torch that marched in the streets to demand justice. But torches burn out and arms grow weary from the weight. We now need those torches to light the hearths in our homes, our businesses, and our hearts so that we remain as committed to this work a decade from now as we are today.

We cannot relent. There is too much to make up for and the stakes are too high. 

 

By: Mia Watson on 7/29/2020

Champlain Valley Office of Economic Opportunity (CVOEO)'s Fair Housing Project will host a free, hour-long webinar on Friday, July 31 at 12:30 p.m. It will discuss the current state of homeownership and housing in Vermont (including racial inequities), describe how to access community housing data, and will share resources for homeowners affected by the pandemic, including the Vermont COVID Emergency Mortgage Assistance Program. Speakers will include George Demas, VHFA's General Counsel, as well as Shaun Gilpin of the Vermont Department of Housing and Community Development and Jackson Dean of Vermont Affordable Housing Coalition. There will be time for questions during the session. 

Register online to get a link to join the webinar. 

For more information, visit CVOEO's Fair Housing Webinar page or contact Jess Hyman at 802-660-3456 x 106 or fhp@cvoeo.org

By: Mia Watson on 7/28/2020

Vermont Housing Finance Agency (VHFA) is in the process of updating the Qualified Allocation Plan (QAP) for 2022 to 2023. The Agency sought initial public comment on the plan in February. As part of its continued public engagement VHFA will hold four virtual informational sessions in August and September for the public to ask questions and provide further feedback on proposed QAP updates. 

The Federal Low Income Housing Tax Credit (LIHTC) Program is the largest single source of funding for affordable housing development in Vermont. The program requires that each tax credit allocating agency maintain a Qualified Allocation Plan (QAP) that sets eligibility and criteria for awarding state and federal tax credits to developers of affordable housing. The QAP is a compilation of IRS mandates, national best practices and state housing priorities. In Vermont, VHFA convenes the Joint Committee on Tax Credits, which solicits public feedback, reviews the policies in the QAP and makes recommendations to the VHFA Board of Commissioners. The Board votes to adopt the plan before being sent to the Governor for approval. 

Proposed QAP changes for 2022/2023 will be presented in two parts over two different sessions listed below:

Informational Session 1 & 3 Topics: Basis Boost, Age-Restricted Housing, Application Process, HUD Subsidy Layering Review standards and limits, Supportive Housing, Developer Fees, Project Cost & VHCB/VHFA Building Design Standards.

Date and Time

Zoom Digital Meeting Link

Dial-in Option

August 12th:  1:00-3:00 pm

https://us02web.zoom.us/j/87107543489

1-646 558 8656
Meeting ID: 871 0754 3489

September 2nd:  1:00-3:00 pm

https://us02web.zoom.us/j/83555195873

1- 646 558 8656
Meeting ID: 835 5519 5873

 
Informational Session 2 & 4 Topics: State Credit Priorities, QAP Definitions for Blight and Transitional Housing. Evaluation Criteria including affordability targeting, access to transportation, site location and community development designation, bedroom count priority, and project debt capacity.  

Date and Time

Zoom Digital Meeting Link

Dial-in Option

August 20th:  10:00am-12:00pm

https://us02web.zoom.us/j/85849074322

1-646-558-8656
Meeting ID: 858 4907 4322

September 9th:  1:00-3:00pm

https://us02web.zoom.us/j/87260007924

1-646-558-8656
Meeting ID: 872 6000 7924

 

Although the topics will be the same for both sets of sessions, the content in the QAP may evolve between the August and September meetings. VHFA will also be reopening the public comment period in August. 

If you have questions or concerns, you may contact Development staff via email at developmentdept@vhfa.org or by mail at 164 Saint Paul Street, Burlington VT 05402.

Pictured: Laurentide Apartments in Burlington. The project received federal tax credits allocated by VHFA. Photo courtesy of Housing Vermont. 

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By: Mia Watson on 7/27/2020

Vermont Housing Finance Agency (VHFA) has announced an expansion of the Vermont Mortgage Assistance Program in order to assist more Vermont homeowners who have fallen behind on their mortgage and are facing economic hardship brought on by the COVID-19 pandemic.

Previously VHFA had announced that the program would provide up to three monthly mortgage payments directly to the servicer of the mortgage with a goal of preventing future foreclosure. Upon review, the agency is expanding the program to cover up to six monthly mortgage payments. Grants to homeowners still must be made towards actual delinquent mortgage payments that have already been missed by the time of application. However, recipients may receive less than six months of payments depending on funding availability. Existing applicants need not reapply to receive this extended benefit.

VHFA also announced that owners of mobile homes who have mortgages and meet other eligibility criteria  can receive assistance through the Mortgage Assistance Program, in addition to assistance with their lot rental payments through the Vermont State Housing Authority.

All other eligibility criteria remains the same. Applicants must apply by August 31. For further questions, please contact Vermont Legal Aid/Legal Services at (800) 889-2047.

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