This January 8, the Vermont Housing Finance Agency or VHFA will sell $37 million in bonds toward the creation of more affordable, decent, green housing for low- and moderate-income residents across Vermont.
These sustainability bonds are issued as part of the statewide initiative, “Housing for All”, creating half a thousand units of affordable housing in Vermont.
Affordable Housing in Vermont
Housing for All, according to VHFA’s official statement, is the largest “single investment” of state funds to support housing in the history of Vermont.
Per the initiative, the proceeds from the bond offering will create 550 to 650 homes with the following targets:
- Twenty-five percent (25%) of the housing funded by the bonds have to be affordable for households with income between 80% and 120% of the area median income
- Twenty-five percent (25%) of the units funded by the bonds have to be affordable for very low-income households, or those with income below 50% of the AMI.
As of 2017, a household with four members in Vermont has a median income of $69,300 based on HUD estimates.
People’s United Bank has already pledged to buy $5 million of the sustainability bonds that build on green bonds and socially responsible investments, per VHFA.
Indeed, the Vermont Housing & Conservation Board (VHCB), who is tasked to select which housing projects will be funded first from the bond offering, will adopt Green Building standards on some of the funded projects.
For more information on the bonds (also known as the Vermont Property Transfer Tax Revenue Bonds 2018), visit this site.
Down Payment Assistance in Vermont
VHFA is a non-profit organization that provides low-to-moderate-income Vermonters access to affordable mortgages.
The organization, through participating credit unions, banks, and other mortgage companies, offers first-lien mortgages for the purchase of primary residence.
According to VHFA, prospective homebuyers benefit from its purchase mortgages because of low interest rates, low down payments, and low monthly mortgage insurance rates.
Eligible borrowers of VHFA mortgages can also take advantage of up to $825 in property transfer tax savings.
These VHFA mortgages, more importantly, can be combined with second mortgages that cover up to $5,000 in down payment and closing costs.
To be clear, the amount of the VHFA Assist second mortgage must not exceed the amount of the required down payment and actual closing costs on the first-lien mortgage that pertains to VHFA first-lien mortgage only.
This down payment and closing cost assistance program is only available for first-time homebuyers or those purchasing residential property for the first time.
The perks of a VHFA Assist second loan include but are not limited to:
(i) zero interest rate, (ii) no monthly payments, and (iii) $5,000 in down payment and closing cost assistance.
That being said, the second mortgage becomes repayable when the homeowner refinances the loan, sells the home, or pays the mortgage in full. Notably, VHFA does not offer refinance mortgages.
Aside from VHFA mortgages and their second mortgages, what are other mortgage options to buy a home in Vermont? Can you be eligible for other types of down payment assistance?