Housing Credit Program

2021 Housing Credit Application Due Dates

We are pleased to announce the application and award dates for the 2021 Tax Credit Award Rounds as follows:

Application materials can be found on the VHFA website at this link: https://www.vhfa.org/rentalhousing/application-materials. Site visits can be coordinated with other funding agencies as needed, and we encourage pre-application meetings to be scheduled 90 days prior to application.

Bond Credit projects which include State Rental Credits in their funding proposals should apply by the April 16th deadline for consideration at the June VHFA Board meeting. For Bond Credit projects not pursuing State Rental Credits, applications can be processed on a rolling basis.


The Housing Tax Credit was designed by Congress to help create and preserve affordable rental housing for lower income households. It provides a direct cost-based reduction in federal tax liability over a 10-year period for owners of qualifying rental housing who agree to conform to certain operating restrictions for a 15-year period or longer.

Housing Credits in Vermont

The Tax Reform Act of 1986 set a maximum housing credit allocation for each state based on population. Vermont’s 2017 allocation is $2.71 million.

Housing Tax Credits (also known as federal Low Income Housing Tax Credits {LIHTC}) bring substantial equity investment into Vermont's housing market. Housing Tax Credits have produced most of Vermont's affordable rental housing developed since the program's inception in 1987. Since Vermont is a rural state with little development capital available, the credits allocated have been a very effective means of raising equity capital for the construction and rehabilitation of much-needed rental housing. Thousands of apartments have been created or preserved to target households earning 60 percent of the median income or less.

Housing Tax Credits also benefit Vermont's economy.  Credits allocated in Vermont have resulted in millions of dollars in acquisition, development, and construction activity, benefiting local and regional economies statewide.

Federal Allocated and Bond Tax Credits

Federal Bond Credits are similar to Allocated Credits, but provide a lower level of credits and therefore lower equity investment to the project. Bond Credits are automatically provided to eligible projects in conjunction with private activity tax-exempt bond financing.

Vermont Housing Tax Credit

In addition to the federal Housing Tax Credit program, Vermont has a Housing Tax Credit program.  Developers can use the Vermont Housing Tax Credit program in tandem with the federal Housing Tax Credit to assist in the creation and preservation of affordable rental housing.

Using Housing Tax Credits

Housing Credits are awarded based on eligible new construction and rehabilitation housing costs. Both nonprofit and for-profit project sponsors can then "sell" (syndicate) these credits to create equity for the development. Investors purchase the "present value" of ten years' worth of credits. For this reason, the equity raised from syndicating tax credits can be substantial.

Allocating credits

The allocation of federal and state credits is highly competitive and continues to be oversubscribed in each allocation round. VHFA is responsible for administering the federal and state housing credit programs and allocates credits to specific projects in accordance with Vermont's Qualified Allocation Plan, which is approved and signed by the Governor. The advisory Joint Committee on Tax Credits reviews and adopts allocation policies and reviews VHFA's performance.  VHFA's responsibilities for administering these programs include:

  • Ongoing review of tax credit rules and regulations
  • Maintenance of the state Qualified Allocation Plan in coordination with the Joint Committee on Tax Credits
  • Coordination, receipt, review and underwriting of  Housing Tax Credit applications for presentation to the VHFA Board of Commissioners
  • Administration of the initial reservation, and ongoing compliance monitoring of projects with IRS requirements

As with debt-financed projects, those financed with Housing Tax Credits require an extensive level of underwriting analysis. 

Compliance monitoring

VHFA conducts compliance monitoring activities for the Housing Tax Credit Program. Multifamily owners and managers whose properties receive Housing Credits are responsible for complying with federal requirements associated with this program. VHFA staff conduct physical inspections, review tenant file documentation, and monitor IRS-based file retention requirements. Read a summary of VHFA's asset management and monitoring activities.

For more information on compliance monitoring, contact VHFA Director of Asset Managment and Compliance or see VHFA's LIHTC Compliance Manual.

The Vermont COVID Emergency Mortgage Assistance Program is no longer accepting applications. For emergency rental assistance, please contact Vermont State Housing Authority.