In the past, the federal government was the sole funder of the construction of many affordable housing developments. Today, dedicated affordable housing is usually created using subsidies from multiple sources, including federal, state, and local governments; financial institutions; and charitable foundations. Other dedicated affordable units are created as a result of affordability requirements or incentives established by local or state government. These homes may be built by for-profit developers who don’t ordinarily focus on affordable housing but are willing to do so in order to get their projects approved. Homes developed as “affordable housing” must be affordable to renters at program-defined income levels. These apartments may be kept affordable either through rent limits (i.e monthly rent cannot exceed certain standards) or through the provision of rental assistance (i.e. payments on behalf of tenants to ensure monthly rent does not exceed 30% of household income).
Low Income Housing Tax Credit
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The Housing Credit was designed by Congress to assist in the creation and preservation of affordable rental housing for low-income households. It is currently the most used funding source for developers creating housing for low-income households. It provides a reduction in federal tax liability over a 10-year period for owners of qualifying rental housing who agree to conform to certain operating restrictions for at least 15 years. This program is not administered by HUD but instead is run through the Internal Revenue Service. For more information: Contact the management agent of a specific tax credit project or read more about the Low Income Housing Tax Credit program. The Vermont Housing Finance Agency is the state administering agency for this housing program, to read more about Vermont-specific program information, go to VHFA's website.
VHFA Development financing
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Vermont Housing Finance Agency Loan
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VHFA offers low interest construction and permanent mortgage financing for the development and preservation of affordable rental housing. Specific requirements regarding rent restrictions and qualifying household income may vary with the funding source. However, all developments must serve at least 51% low- and moderate-income Vermonters. Funds usually come from a number of sources including: proceeds from the sale of tax-exempt or taxable bonds; Federal Home Loan Bank non-member advances; pension fund mortgage pools; and VHFA reserves. For more information on the funding offered through VHFA, go to the VHFA website or for specific information on the rental restrictions of a VHFA-financed property, contact the property manager directly.
Vermont Housing Conservation Board funding
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Vermont Housing & Conservation Board Funding
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VHCB funds the acquisition, rehabilitation and construction of affordable housing by nonprofit housing organizations. Affordable housing projects eligible for funding include rental housing, rental and ownership coops, mobile home parks, single family homes, shared elderly housing, single room occupancy housing, and group homes. VHCB funds help to leverage federal and private funds to develop housing to serve lower income households and individuals with special needs. VHCB offers a loan and grant program, feasibility funding, and other programs to support affordable home ownership. For more information on the funding offered through VHCB, go to the VHCB website or for specific information on the rental restrictions of a VHCB-funded property, contact the property manager directly.
Community Development Block Grant
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The Community Development Block Grant (CDBG) program provides annual grants on a formula basis to many different types of grantees. In Vermont, the City of Burlington gets its own CDBG funding from HUD and the State gets a separate allocation to cover the rest of the state outside of the greater Burlington area. CDBG funds may be used for activities including, but are not limited to: acquisition of property; relocation and demolition; rehabilitation of residential and non-residential structures; and activities relating to energy conservation and renewable energy resources. For more information on Community Development Block Grant, go to HUD's website or contact the property manager directly.
HOME Program
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The HOME Program can be used in: developing rental housing, tenant-based rental assistance, homeownership activities, and homeowner repair. The projects listed in the DoARH have received HOME funding to develop rental housing. This housing must adhere to certain limits that HUD has outlined. There are limits on the amount of income a tenant in a HOME-funded unit can earn, as well as limits on the rent that can be charged for a unit. The HOME program is administered through the City of Burlington for the Greater Burlington Area, and the Vermont Housing and Conservation Board administers the program for the rest of the state. For more information on the HOME program, go to HUD's website or contact the property manager directly.
Federal Home Loan Bank (FHLB) Affordable Housing Program
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The Affordable Housing Program (AHP) is locally awarded by the Federal Home Loan Bank of Boston to address, in partnership with member institutions, the affordable-housing needs of communities across New England. Ten percent of the Bank's net earnings funds the program, which awards grants and low-interest advances, or loans, through member institutions. The Bank's member institutions work with local housing organizations to apply for funds to support initiatives that serve very low- to moderate-income households in their communities. The actual terms are determined by the member financial-institution applicant, based on the specific needs of the development. For more information: Contact the management agent of a specific AHP project or go to the FHLB of Boston's AHP website.