By: Mia Watson

January 21, 2021

Vermont Finance Agency (VHFA) has worked with local financial institutions to fund affordable homes that will be sold to low- and moderate-income Vermonters. Passumpsic Bank, Union Mutual Insurance, Community National Bank, National Life, Northfield Savings Bank, and Union Bank invested in Vermont Affordable Housing Tax Credits available through VHFA.

Vermont Affordable Housing Tax Credits provide funding for rental housing development and affordable homeownership opportunities. These state tax credits are awarded by VHFA along with federal tax credits and loans to local housing developers. The credits are then sold to investors to raise the start-up capital needed for housing development. $425,000 in state homeownership credits were purchased by Passumpsic Bank, Union Mutual Insurance, Community National Bank, National Life, and Northfield Savings Bank. Together, the sale of the credits raised nearly $2 million for affordable homeownership.

This series of tax credits were initially awarded to developers this past August. Projects include affordable homes developed by Champlain Housing Trust (CHT) in Burlington, South Burlington, and Winooski and affordable townhouses at East Branch Farms in Manchester developed by Shires Housing. Homes receiving tax credits will be sold at prices affordable to moderate income households, retaining their affordability for future buyers should the owners sell the home in the future. The tax credits will also fund approximately 33 new energy-efficient mobile homes across the state through Champlain Housing Trust’s statewide Mobile Home Down Payment (MHDP) Loan Program.

An additional investment by Union Bank and National Life will fund VHFA’s Down Payment Assistance program. This is the seventh straight year that Union Bank has purchased these credits. Since 2015, VHFA’s Down Payment Assistance program has helped 1,361 first-time homebuyers purchase a home in Vermont.

State housing tax credits are a sound financial instrument for institutions, and are also an important investment in Vermont communities, which have an urgent need for more affordable homeownership opportunities. The median Vermont home sold for $244,000 in mid-2020, which would be affordable for a household with an annual income of $62,685 per year. However, the median Vermont renter household earns just $35,759.

Pictured: Rendering of future homes at Mallets Bay Avenue in Winooski. Courtesy of Champlain Housing Trust