The Vermont Housing Finance Agency (VHFA) announced the launch of the VHFA Housing Investment Fund with the Vermont Community Foundation (VCF) as its founding investor. This will be initiated with a VCF investment of $1.5 million for a pre-development program and a long-term loan program made to developers of affordable rental housing. VHFA is working to expand the fund with investments from other community partners to grow its impact.
The VHFA Housing Investment Fund will initially focus on the development and preservation of affordable rental housing, consisting of both short-term pre-development loans and much needed long-term fixed-rate 20- to 30-year permanent loans for projects. Five-hundred thousand dollars in revolving pre-development loans will free up capital for affordable housing development and help projects in their critical early stages. Examples of uses for pre-development include appraisals, market studies, legal consultations, building design and environmental tests. These uses can be essential for determining the feasibility of a project, as well as ensuring that developers are in the best possible position to apply for other funding sources. The pre-development loan program will help make worthwhile yet complex projects possible.
VCF’s investment will also allow VHFA to provide developments with low-interest permanent debt for 20-30 years, helping a project remain affordable and sustainable over time. VHFA will use $1 million of VCF’s investment to leverage an estimated $25 million in various funding sources, creating 100 to 200 new homes.
In awarding these resources, VHFA will be looking for projects that serve multiple policy goals, including downtown redevelopment, historical preservation, sustainable growth, support for local businesses, energy efficiency and serving the most vulnerable Vermonters.
