July 21, 2024

Housing Finance Development

It's Your Housing Finance Development

Treasurer announces more than $55 million in low-interest loans to support housing development

Mike Pieciak speaks at a press conference in Montpelier in August 2022. Pieciak announced Wednesday that more that $55 million in low-interest loans will be made available to support housing investments. Photo by Natalie Williams/VTDigger

BERLIN — Vermont Treasurer Mike Pieciak announced Wednesday that more than $55 million in low-interest loans will be made available to support housing investments. 

“Hospitals can’t hire nurses, schools can’t hire teachers, first responders can’t hire new recruits, because all of those individuals are unable to find housing,” Pieciak said at a press conference announcing the loans. “The July flooding has only exacerbated this problem for hundreds of Vermonters that are now trying to find permanent long-term housing, which is unavailable.”

Estimates from the Vermont Housing Finance Agency suggest the loans can support 1,100 new housing units by leveraging an additional combined $340 million in state, federal and private funding for yet-to-be-proposed projects. Those exact numbers remain subject to change.

Gov. Phil Scott, who announced the funding alongside Vermont’s treasurer, praised the “new and important tool in our housing toolbox.” 

The low-interest loans, which officials said will be repaid to the state with about 1% to 2% interest, depending on their terms, are part of the “10% in Vermont” program. The program allows the treasurer to use 10% of the state’s cash on hand for loans supporting economic development. As of Wednesday, the state had more than $2.1 billion in cash on hand, Pieciak said, a number that’s grown in recent years with federal Covid-19 dollars and larger annual state budgets.

A group of people standing in front of a podium.
Treasurer Mike Pieciak announced more than $55 million in low-interest loans to support housing development on Wednesday. Photo by Ethan Weinstein/VTDigger

The treasurer’s office opened up applications for loans in June, and Pieciak said Wednesday that more than 40 applications have been received. More awards will be considered on a rolling basis, and funds will begin being deployed “in the next few months,” Pieciak said.

The vast majority of the loan funding — $50 million — will go to the Vermont Housing Finance Agency, which will support:

  • $14 million in new affordable housing, with 100 apartments expected to support people exiting homelessness;
  • $14 million on housing focused on Vermont’s economic need and employer housing needs;
  • $6 million for small and new developers building in underserved communities;
  • $6 million for flood resilience;
  • $5 million supporting missing-middle homeownership;
  • $5 million for manufactured home communities.

The housing finance agency will loan the $50 million to developers at interest rates it expects to be below 3% or 4%, its executive director said on Wednesday. VHFA will also be in charge of making sure loans are repaid to the state.

A remaining $5 million loan will support an expansion of Vergennes Grand, a low- and middle-income assisted living facility in Vergennes, which is expected to create 65 more beds for elderly individuals, Pieciak said.

The last $500,000 announced on Wednesday will support nine apartments in St. Johnsbury, according to the treasurer.