Vermont Housing Improvement Program 2.0

If you require details about VHIP awards given before 2024, please describe our initial VHIP page. The initial VHIP financing was sourced from State Fiscal Recovery Funds, which had various guidelines. The requirements and alternatives detailed here do NOT use to tasks approved before March 25, 2024.

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

Drawing from insights acquired over the previous 3 years and more than 500 units moneyed, this upgraded program maintains our dedication to broadening budget friendly housing. VHIP 2.0 now uses awards for limited brand-new construction. Additionally, it presents a 10-year forgivable loan alongside the existing 5-year grants, aiming to even more incentivize property owners. This brand-new choice requires leasing systems at reasonable market prices without the requirement for referrals from Coordinated Entry Organizations.

Table of Contents:

What can you make with VHIP 2.0 financing?
Just how much financing are jobs 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 finish with VHIP 2.0 financing?

VHIP 2.0 uses grants or forgivable loans to:

Rehabilitate existing vacant units.
Rehabilitate structural aspects effecting multiple units, such as the roofing system of a multi-family residential or commercial property.
Develop a 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 domestic systems.
Complete repair work necessary for code compliance in occupied units (just qualified for 10 year forgivable loan)

Rehabilitation jobs can include updates to fulfill housing codes, weatherization, and availability enhancements, of qualified rental housing units.

How much financing are jobs qualified for?

Based upon the kind of project, residential or commercial property owners are qualified to receive approximately:

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

* Structural repair grant or loan awards are offered for a maximum of $50,000 per award produced a residential or commercial property. For each structural award made, a rent-ready unit in the very same building should be overloaded with a VHIP Covenant or FLA/Promissory Note. Contact your HOC or DHCD for more details and to discuss your project if you are considering structural repair work that affect more than one unit.

What are the program requirements?

Program Match: All individuals are required to supply a 20% match of the award, the option for an in-kind match for unbilled services or owned materials. For instance, an individual who receives 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 accepting charge at or below HUD Fair Market Rent (FMR) or coupon amount for the length of the arrangement (5 or ten years, learn more about these alternatives here). Participants will be required to submit 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 should view a Landlord-Tenant Mediation video and complete 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 see). 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 potential penalties, gain access to requirements for individuals with impairments, consisting of affordable accommodations and affordable adjustments, and best practices for housing service providers. This training will be confirmed through conclusion of a short test. Please click on this link to register. 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 participants deserve to select their tenants. However, the renters they select should fulfill the program requirements, based upon if they are registered in the 5- or 10-year system (click on this link to get more information). For residential or commercial properties enrolled in this program, the residential or commercial property owner may not require a credit rating higher than 500, and participants are restricted to charging no greater than one month's lease for a deposit, regardless of whether it is called a security deposit, a damage deposit or an animal deposit, last month's rent, etc. Additionally, residential or commercial property owners should cover the expense of running background examine potential tenants. Residential or commercial property owners are likewise needed to accept any housing vouchers that are available to pay all, or a portion of, the occupant's lease and energies. Additionally, residential or commercial property owners must accept paper applications for renters with minimal web gain access to.

Out-of-State Owners: Out-of-State owners are required to determine a residential or commercial property supervisor located within 50 miles of the systems to make sure a regional, responsible party can manager the residential or commercial property in the lack of the residential or commercial property owner.

5-Year Grant Versus 10-Year Forgivable Loan

The primary difference in 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 ten years).
The 5-year grant option features extra tenant selection requirements to lease to a home exiting homelessness

To get more information specifics about these 2 choices, examine the sections below.

5-Year Grants

Any residential or commercial property, with the exception of tenant occupied units attending to code non-compliance issues, obtaining VHIP 2.0 can choose to receive a 5-year grant. This compliance duration will begin as soon as the VHIP 2.0 system is put in service. This grant needs that:

The system is rented at or below HUD Fair Market Rent for the area for a minimum of 5 years.
That the residential or commercial property manager work with Coordinated Entry Lead Organizations to discover ideal 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 result. This covenant will be reliable for 5 years and states that for this period, the system must remain a long-term leasing with a month-to-month rental rate at or listed below HUD Fair Market Rent which the Department of Housing and Community Development must authorize 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 released the grant figures out that a household leaving homelessness is not offered to rent the unit, the landlord shall rent the system to a family with an income equal to or less than 80 percent of location average earnings. If such a home is unavailable, the residential or commercial property owner may rent the system to another household with the approval of the DHCD or HOC.

Grant to Loan Conversion: A property manager might transform a grant to a forgivable loan upon approval by DHCD and the HOC that authorized the grant. When the grant is converted to a forgivable loan, the residential or commercial property owner will 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 got involved in the grant program for 2 years prior to transforming to a forgivable 20% of the funding will be forgiven, and the forgivable loan terms would use for 8 years.

Note. This only uses to projects that got financing through VHIP 2.0. The preliminary VHIP financing was sourced from State Fiscal Recovery Funds, which had various regulations. The requirements and choices laid out here do NOT use to projects authorized before March 25, 2024, and those grants can NOT be transformed to forgivable loans.

10-Year Forgivable Loans

Any residential or commercial property looking for VHIP 2.0 can decide to get a 10-year forgivable loan. This compliance duration will start once the VHIP 2.0 unit is put in service. This grant requires that the unit is leased at or listed below HUD Fair Market Rent for the location for at least 10 years. The owner must rent the system for ten years at or below FMR to be forgiven in its totality. Funds will require to be paid back to the State of Vermont for every single year this requirement is not fulfilled i.e. if an owner just rents the system for 7 years at or listed below FMR, 3 years (30%) of funding 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 procedure, from figuring out if the program is an excellent suitable for your project, how to apply, payment dispensation, keeping program requirements, to selling a VHIP 2.0 residential or commercial property.

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

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

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

Fair Market Rent & Recertification

All residential or commercial property owners taking part in VHIP 2.0 are required to charge rents at or listed below HUD Fair Market Rent (FMR) for the length of the contract, depending on whether the residential or commercial property owner picks the 5-year grant or 10-year forgivable loan alternative. FMRs frequently released by HUD represent the cost of leasing a moderately priced house unit in the regional housing market.

Fair Market Rent Calculator - To utilize the calculator, you need to complete the energy worksheet, which shows which energies the tenant is accountable for payment. Once the energy worksheet is complete, the calculator will show the maximum allowable lease based on the county the system lies in and the variety of bed rooms.

Fair Market Rent Recertification Form - Residential or commercial property owners taking part in VHIP 2.0 must send a yearly recertification form to ensure they adhere to the program requirements, consisting of FMR. While the program requirements are in effect, residential or commercial property owners will get an annual request to complete the recertification form. Residential or commercial property owners are encouraged to proactively complete this type upon turnover or lease renewal.

If you need support finishing the recertification form or determining FMR for your area, please get in touch with your local Homeownership Center or the State Housing Division (VHIP@vermont.gov).