Grant

Vermont Housing and Conservation Board ($600,000)

Program-Related Investment

Vermont Housing Finance Agency ($2,000,000)

Background

Vermont’s strong record of successfully preserving affordable housing – the state has lost virtually no assisted housing to conversion since 1987 – positions the state to address the ever-increasing demand for affordable rental housing from its low- and moderate-income residents. Vermont’s relatively strong economy and limited exposure to the subprime mortgage crisis are expected to increase upward pressure on rents. At the same time, workers in Vermont’s fast-growing service industry do not earn enough to afford the state’s fair-market rents. In 2005, demand for affordable housing exceeded supply by 21,000 units. By 2018, a total of 7,000 (out of total of 12,000) rental units are at risk due to expiring restricted use provisions and Section 8 contracts, and housing and historic tax credit compliance period termination.

Project Description

Equipped with a comprehensive database and an established partnership with a solid track record of preserving affordable housing, Vermont’s preservation initiative will meet a need for additional loan products and technical assistance. Vermont will first form a Preservation Council to ensure that any existing or new lending facilities available for affordable housing complement the state’s preservation activities. In addition to acting as a clearinghouse for preservation activities, the Preservation Council will be responsible for generating a protocol for funders to use when prioritizing their financial resources for the acquisition, refinance, and recapitalization of preservation projects.

The grant will support several initiatives that provide substantial techinical assistance and various training workshops to nonprofit organizations engaged in preservation. In particular, the workshops will educate nonprofits about the existing and new capital sources for preservation-related activities. Technical assistance will include the creation and dissemination of a standardized appraisal guide for properties with federal rental assistance to better assess their true market value, to encourage more owner participation in preservation strategies, and to provide enhanced information to nonprofit preservation-minded organizations. To improve project sustainability, the grant will ensure that developers undertake energy-efficiency and capital needs assessments for any preservation projects, which will improve underwriting assumptions for preservation deals. Finally, the grant will fund the statewide expansion of a supportive housing model that uses Medicare and Medicaid to enable senior housing projects to meet the needs of frail elders. A key partner in this effort will be the Cathedral Square Corporation, a statewide nonprofit with extensive experience in providing a variety of housing options for seniors. The program-related investment will help capitalize two new loan products and expand an existing pre-development loan product managed by Vermont Housing Finance Agency. One of the new products will be an equity bridge loan program that will lengthen the period over which investors contribute equity, thereby increasing the level of contribution and bringing more equity to preservation projects. The other new loan product will be for low-cost energy loans to preservation projects, in which feasible energy savings will be the primary source of repayment. The pre-development loan fund will provide loans to eligible nonprofit housing developers for the soft costs associated with determining project feasibility, such as engineering assessments and appraisals.

Contact

Pam Boyd, Communications Director
Vermont Housing & Conservation Board
802 828-5075
Vermont Housing & Conservation Board, 58 East State St., Montpelier, VT 05602
pboyd@vhcb.org 

John Fairbanks, Public Affairs Manager
Vermont Housing Finance Agency
802 652-3424
VHFA, POB 408, Burlington, VT  05402-0408
jfairbanks@vhfa.org