Vermont Housing Improvement Program 2.0

If you need information about VHIP awards given before 2024, please describe our original VHIP page. The preliminary VHIP financing was sourced from State Fiscal Recovery Funds, which had various policies. The requirements and choices laid out here do NOT apply to jobs approved before March 25, 2024.

The Vermont Housing Improvement Program (VHIP) is relaunching as VHIP 2.0!

Drawing from insights gained over the past 3 years and more than 500 systems moneyed, this updated program keeps our dedication to broadening affordable housing. VHIP 2.0 now uses awards for restricted brand-new construction. Additionally, it introduces a 10-year forgivable loan together with the existing 5-year grants, intending to further incentivize proprietors. This brand-new choice needs leasing systems at fair market value without the requirement for recommendations from Coordinated Entry Organizations.

Tabulation:

What can you make with VHIP 2.0 financing?
Just how much funding are projects qualified for?
What are the program requirements?
5-Year Grant Versus 10-Year Forgivable Loan
VHIP 2.0 Documents Resource Guide for Residential Or Commercial Property Owners
Fair Market Rent (Recertification).
FAQ's.
Recertification.
VHIP Recipient List

Resource Guide for Residential Or Commercial Property Owners Program Stats

What can you make with VHIP 2.0 funding?

VHIP 2.0 provides grants or forgivable loans to:

Rehabilitate existing vacant units.
Rehabilitate structural elements effecting multiple systems, such as the roofing of a multi-family residential or commercial property.
Develop a brand-new Accessory Dwelling Unit (ADU) on an owner-occupied residential or commercial property.
Create brand-new systems within an existing structure.
Create a brand-new structure with 5 or less property systems.
Complete repair work necessary for code compliance in occupied systems (just eligible for ten years forgivable loan)

Rehabilitation projects can include updates to satisfy housing codes, weatherization, and ease of access enhancements, of eligible rental housing units.

How much funding are projects qualified for?

Based on the type of job, residential or commercial property owners are eligible to get up to:

$ 30,000 per system for rehab of 0-2-bedroom units.
$ 50,000 per unit for rehab of 3+ bed room systems, structural components affecting several units *, brand-new system production, or creation of Accessory Dwelling Units (ADUs)

* Structural repair grant or loan awards are offered for an optimum of $50,000 per award made for a residential or commercial property. For each structural award made, a rent-ready unit in the same structure must be encumbered with a VHIP Covenant or FLA/Promissory Note. Contact your HOC or DHCD for more information and to discuss your job if you are considering structural repair work that impact more than one unit.

What are the program requirements?

Program Match: All participants are required to provide a 20% match of the award, the option for an in-kind match for unbilled services or owned products. For example, an individual who gets an award of $50,000 will be needed to provide a $10,000 match.

Fair Market Rent: Participants are also required to sign a rental covenant consenting to charge at or listed below HUD Fair Market Rent (FMR) or voucher amount for the length of the agreement (5 or 10 years, find out more about these alternatives here). Participants will be needed to send a yearly recertification type to ensure they are in compliance with the program requirements. To calculate HUD FMR for your location, take a look at our resources on Fair Market Rent.

Landlord Education: VHIP 2.0 candidates must enjoy a Landlord-Tenant Mediation video and finish a Fair Housing Training as part of the application process. The Landlord-Tenant Mediation video is provided by the Vermont Landlord Association (Please click on this link to view). The online, self-paced Fair Housing training is provided by CVOEO. It consists of an introduction of state and federal anti-discrimination requirements, examples of illegal housing discrimination and prospective charges, access requirements for people with disabilities, consisting of sensible lodgings and sensible adjustments, and best practices for housing providers. This training will be confirmed through conclusion of a brief quiz. Please click here to sign up. You will be asked to develop an account on the Ruzuku learning platform, then you'll have immediate access to the training. If you experience any problems or have concerns, please contact CVOEO at classcoord@cvoeo.org or 802-660-3455 ext. 205.

Tenant Selection: VHIP 2.0 individuals have the right to pick their tenants. However, the occupants they pick need to fulfill the program requirements, based on if they are enrolled in the 5- or 10-year tract (click here to find out more). For residential or commercial properties enrolled in this program, the residential or commercial property owner may not need a credit rating greater than 500, and participants are restricted to charging no greater than one month's rent for a deposit, regardless of whether it is called a security deposit, a damage deposit or a pet deposit, last month's lease, and so on. Additionally, residential or commercial property owners should cover the cost of running background look at prospective tenants. Residential or commercial property owners are likewise needed to accept any housing vouchers that are available to pay all, or a part of, the renter's rent and energies. Additionally, residential or commercial property owners should accept paper applications for renters with minimal internet access.

Out-of-State Owners: Out-of-State owners are required to identify a residential or commercial property supervisor situated within 50 miles of the units to ensure a regional, accountable party can manager the residential or commercial property in the absence of the residential or commercial property owner.

5-Year Grant Versus 10-Year Forgivable Loan

The main distinction between the 5-year grant and the 10-year forgivable loans are:

- The period for which the residential or commercial property owner should charge at or below HUD Fair Market Rent for the enrolled systems (5 v 10 years).
The 5-year grant alternative comes with additional tenant choice requirements to rent to a family leaving homelessness

To read more specifics about these two choices, review the sections listed below.

5-Year Grants

Any residential or commercial property, with the exception of tenant inhabited systems attending to code non-compliance concerns, requesting VHIP 2.0 can opt to get a 5-year grant. This compliance duration will begin when the VHIP 2.0 unit is put in service. This grant needs that:

The unit is leased at or listed below HUD Fair Market Rent for the area for at least 5 years.
That the residential or commercial property manager work with Coordinated Entry Lead Organizations to discover suitable occupants exiting homelessness for a minimum of 5 years or with USCRI to find refugee families to lease the unit to

Participants should sign a rental covenant to this effect. This covenant will be efficient for 5 years and states that for this period, the unit should remain a long-term leasing with a regular monthly rental rate at or below HUD Fair Market Rent which the Department of Housing and Community Development must approve the sale of the residential or commercial property.

Tenant Selection: If the Department of Housing and Community Development (DHCD) or the Homeownership Center (HOC) that issued the grant identifies that a home leaving homelessness is not readily available to lease the unit, the property owner will lease the system to a family with an income equal to or less than 80 percent of area median earnings. If such a family is not available, the residential or commercial property owner may lease the unit to another family with the approval of the DHCD or HOC.

Grant to Loan Conversion: A proprietor might transform a grant to a forgivable loan upon approval by DHCD and the HOC that approved the grant. When the grant is converted to a forgivable loan, the residential or commercial property owner shall get a 10% credit for loan forgiveness for each year in which the property manager takes part in the grant program. For instance, if the residential or commercial property owner participated in the grant program for 2 years prior to transforming to a forgivable 20% of the financing will be forgiven, and the forgivable loan terms would get 8 years.

Note. This only applies to jobs that received financing through VHIP 2.0. The initial VHIP funding was sourced from State Fiscal Recovery Funds, which had different regulations. The requirements and options laid out here do NOT use to tasks authorized before March 25, 2024, and those grants can NOT be converted to forgivable loans.

10-Year Forgivable Loans

Any residential or commercial property making an application for VHIP 2.0 can decide to get a 10-year forgivable loan. This compliance period will begin as soon as the VHIP 2.0 unit is positioned in service. This grant requires that the unit is rented at or below HUD Fair Market Rent for the area for at least ten years. The owner must lease the unit for ten years at or listed below FMR to be forgiven in its totality. Funds will need to be paid back to the State of Vermont for each year this requirement is not satisfied i.e. if an owner only leases the system for 7 years at or below FMR, 3 years (30%) of financing will not be forgiven.

VHIP Documents

General Documents

VHIP 2.0 Resource Guide for Residential Or Commercial Property Owners - This thorough guide strolls residential or commercial property owners through every action of the VHIP 2.0 process, from figuring out if the program is an excellent fit for your project, how to apply, payment dispensation, preserving program requirements, to offering a VHIP 2.0 residential or commercial property.

VHIP 2.0 Recipient List - The identity of VHIP receivers and the quantity of a grant or forgivable loan are public records and are published quarterly on this website.

Since there are several project types VHIP 2.0 supports, the Frequently Asked Questions (FAQs) specify to the kind of project using for financing. To ask concerns about your task, connect with your local homeownership center.

Rehabilitation or Conversion of Unoccupied Units
Accessory Dwelling Units
New Unit Creation (within a new structure).
Rehabilitation of Occupied Units

Fair Market Rent & Recertification

All residential or commercial property owners getting involved in VHIP 2.0 are needed to charge leas at or listed below HUD Fair Market Rent (FMR) for the length of the contract, depending on whether the residential or commercial property owner selects the 5-year grant or 10-year forgivable loan choice. FMRs routinely published by HUD represent the cost of renting a moderately priced dwelling system in the local housing market.

Fair Market Rent Calculator - To utilize the calculator, you must complete the energy worksheet, which indicates which utilities the renter is responsible for payment. Once the utility worksheet is complete, the calculator will show the optimum permitted lease based upon the county the unit lies in and the variety of bed rooms.

Fair Market Rent Recertification Form - Residential or commercial property owners taking part in VHIP 2.0 should submit a yearly recertification kind to guarantee they comply with the program requirements, consisting of FMR. While the program requirements are in effect, residential or commercial property owners will receive a yearly request to finish the recertification kind. Residential or commercial property owners are motivated to proactively complete this type upon turnover or lease renewal.

If you require assistance completing the recertification form or determining FMR for your area, please connect with your local Homeownership Center or the State Housing Division (VHIP@vermont.gov).