Maura Collins (Executive Director, Vermont Housing Finance Agency) presented to the Senate Economic Development Committee on Tuesday, noting that this year the Vermont Housing and Finance Agency (VHFA) is celebrating 50 years.

The loans they provide end up going to 94% first time homebuyers. 70% are also offered down payment assistance etc. The median borrower income is $67,950. They also offer rental housing development along with the Vermont Housing & Conservation Board.

One thing she stressed was the increase in per unit cost. Housing units are getting more expensive to build as materials, labor, and land all increase. The Treasurer made $50M in bonds available recently, which added to their traditional funding sources, but these funds are borrowed from the Vermont State Deposited Treasury and “we really need to pay that back,” she stated.

She reviewed a chart showing the constrictions for renters transitioning to owners. This transition is being made more difficult because of the ratio of income to purchase prices of available homes. Fewer than 5,000 renters are even mathematically eligible to be considered for financing with today’s purchase prices for single family homes.

Collins pointed to the Middle-Income Ownership Program, which assists with affordability gaps. This program provides a subsidy up to 35% of an owner-occupied housing unit development cost. As interest rates change (recently they’ve been going up), more of the 35% goes to the value gap as construction cost increases, while less is available for covering the affordability gap which is meant to “buy down home prices.”

The average single family home cost has reached $323 per square foot. This prohibitive pressure has pushed average house sizes being constructed down. They would like to see more small builders in rural areas getting involved. They are asking for $25M in additional funding to meet this demand.

Senator Brock was concerned about a VTDigger article highlighting “we are not building family housing in many cases but rather single bedrooms etc.” and that is not meeting needs. 

Collins outlined language to Act 47 she would like. The language would allow “recapture of affordability subsidy” for new applications. She noted that the first-generation homebuyer grant program is going well and new lenders to participate. People of color are a large part of the cohort addressed here.

She is anxious to participate in conversations about designations, permit reforms, and a potential Housing Appeals Board model being discussed as part of the changes to Act 250. She also favors creating a rental housing registry to create an inventory, also an enforcement and funding mechanism for compliance with building codes and standards.