Vermont Housing Improvement Program 2.0

If you require information about VHIP awards given before 2024, please refer to our initial VHIP page. The preliminary VHIP funding was sourced from State Fiscal Recovery Funds, which had various guidelines. The requirements and alternatives described 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 got over the past 3 years and more than 500 units moneyed, this upgraded program preserves our dedication to broadening budget-friendly housing. VHIP 2.0 now provides awards for restricted new building. Additionally, it presents a 10-year forgivable loan alongside the existing 5-year grants, aiming to further incentivize proprietors. This brand-new choice needs renting systems at reasonable market value without the requirement for recommendations from Coordinated Entry Organizations.

Table of Contents:

What can you make with VHIP 2.0 funding?
How much funding are tasks eligible 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 systems, such as the roofing of a multi-family residential or commercial property.
Develop a new Accessory Dwelling Unit (ADU) on an owner-occupied residential or commercial property.
Create new units within an existing structure.
Create a brand-new structure with five or fewer residential units.
Complete repair work needed for code compliance in occupied units (just eligible for 10 year forgivable loan)

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

Just how much financing are jobs eligible for?

Based on the kind of job, residential or commercial property owners are eligible to get as much as:

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

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

What are the program requirements?

Program Match: All individuals 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 likewise 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 arrangement (5 or 10 years, discover more about these choices here). Participants will be needed to send an annual recertification kind to ensure they remain in compliance with the program requirements. To determine HUD FMR for your location, check out our resources on Fair Market Rent.

Landlord Education: VHIP 2.0 applicants need to view a Landlord-Tenant Mediation video and complete a Fair Housing Training as part of the application procedure. The Landlord-Tenant Mediation video is supplied by the Vermont Landlord Association (Please click on this link to see). The online, self-paced Fair Housing training is offered by CVOEO. It consists of a summary of state and federal anti-discrimination requirements, examples of illegal housing discrimination and potential penalties, gain access to requirements for individuals with disabilities, consisting of reasonable lodgings and sensible modifications, and finest practices for housing companies. This training will be confirmed through completion of a brief test. Please click here to register. You will be asked to develop an account on the Ruzuku discovering platform, then you'll have instant access to the training. If you experience any issues or have questions, please contact CVOEO at classcoord@cvoeo.org or 802-660-3455 ext. 205.

Tenant Selection: VHIP 2.0 individuals have the right to choose their occupants. However, the renters they choose need to fulfill the program requirements, based upon if they are registered in the 5- or 10-year system (click here to read more). For residential or commercial properties enrolled in this program, the residential or commercial property owner might not require a credit report greater than 500, and individuals are limited 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 a family pet deposit, last month's lease, and so on. Additionally, residential or commercial property owners must cover the expense of running background examine potential occupants. Residential or commercial property owners are also required to accept any housing coupons that are readily available to pay all, or a portion of, the renter's lease and utilities. Additionally, residential or commercial property owners must accept paper applications for renters with restricted web access.

Out-of-State Owners: Out-of-State owners are required to determine a residential or commercial property manager situated within 50 miles of the units to ensure 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 between the 5-year grant and the 10-year forgivable loans are:

- The duration for which the residential or commercial property owner should charge at or listed below HUD Fair Market Rent for the enrolled systems (5 v 10 years).
The 5-year grant option features extra tenant selection requirements to lease to a family leaving homelessness

For more information specifics about these 2 options, examine the sections below.

5-Year Grants

Any residential or commercial property, with the exception of renter inhabited units attending to code non-compliance issues, looking for VHIP 2.0 can decide to get a 5-year grant. This compliance duration will begin once the VHIP 2.0 unit is placed in service. This grant needs that:

The system is rented at or listed below HUD Fair Market Rent for the location for a minimum of 5 years.
That the residential or commercial property manager deal with Coordinated Entry Lead Organizations to find appropriate occupants leaving homelessness for a minimum of 5 years or with USCRI to find refugee homes to rent the system to

Participants must sign a rental covenant to this effect. This covenant will be reliable for 5 years and states that for this duration, the unit must remain a long-term rental with a regular monthly rental rate at or listed below HUD Fair Market Rent and that 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 figures out that a home leaving homelessness is not available to lease the unit, the landlord shall lease the system to a household with an income equivalent to or less than 80 percent of location average income. If such a home is unavailable, the residential or commercial property owner might rent the unit to another home with the approval of the DHCD or HOC.

Grant to Loan Conversion: A property owner might convert 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 landlord takes part in the grant program. For instance, if the residential or commercial property owner took part in the grant program for 2 years prior to converting to a forgivable 20% of the funding will be forgiven, and the forgivable loan terms would obtain 8 years.

Note. This only applies to jobs that received financing through VHIP 2.0. The initial VHIP financing was sourced from State Fiscal Recovery Funds, which had various policies. The requirements and options 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 opt to get a 10-year forgivable loan. This compliance duration will begin as soon as the VHIP 2.0 unit is placed in service. This grant requires that the system is leased at or below HUD Fair Market Rent for the location for a minimum of ten years. The owner needs to rent the unit for 10 years at or listed below FMR to be forgiven in its entirety. Funds will require to be repaid to the State of Vermont for every single year this requirement is not met i.e. if an owner only leases the system for 7 years at or listed 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 extensive guide strolls residential or commercial property owners through every step of the VHIP 2.0 process, from determining if the program is an excellent fit for your job, how to use, payment disbursement, 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 amount of a grant or forgivable loan are public records and are published quarterly on this site.

Since there are several project types VHIP 2.0 assistances, the Frequently Asked Questions (FAQs) are specific to the type of project making an application for financing. To ask questions about your project, 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 getting involved in VHIP 2.0 are needed to charge rents at or listed below HUD Fair Market Rent (FMR) for the length of the agreement, depending upon whether the residential or commercial property owner picks the 5-year grant or 10-year forgivable loan alternative. FMRs frequently published by HUD represent the cost of renting a moderately priced house unit in the regional housing market.

Fair Market Rent Calculator - To use the calculator, you should finish the utility worksheet, which indicates which utilities the tenant is accountable for payment. Once the energy worksheet is total, the calculator will reveal the maximum allowed lease based upon the county the system lies in and the number of bedrooms.

Fair Market Rent Recertification Form - Residential or commercial property owners taking part in VHIP 2.0 should send an annual recertification type 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 a yearly request to complete the recertification type. Residential or commercial property owners are encouraged to proactively finish this kind upon turnover or lease renewal.

If you need assistance completing the recertification kind or figuring out FMR for your location, please connect with your regional Homeownership Center or the State Housing Division (VHIP@vermont.gov).