REGION – The Vermont Housing Finance Agency (VHFA) is making homeownership a reality for first time and repeat buyers in Vermont. Offering competitive mortgage rates, down payment assistance, and tax benefits, VHFA programs provide the financial support and flexibility needed to ease the homebuying process.
VHFA offers reduced interest rates on 30-year, fixed-rate mortgage loans, to reduce long-term costs for borrowers. First-time buyers can benefit from low down payment requirements, starting as low as 0%. Additionally, eligible buyers can save up to $1,735 on Vermont transfer tax at closing, further alleviating financial strain during the purchase process.
To address one of the biggest hurdles for prospective homeowners, VHFA provides two key down payment assistance programs.
The ASSIST Program offers a $10,000 interest-free second lien to help with down payment and closing costs. This loan requires no monthly payments, and is repaid only when the home is sold, refinanced, or the mortgage is paid off. Eligible participants must have never owned a home and maintain less than $30,000 in combined nonretirement assets.
The First-Generation Homebuyer Grant provides a $15,000 grant for down payment and closing costs. This grant is specifically tailored for those who have never owned a home, and meet the additional criteria of having been in foster care or having parents who never owned a home.
These programs can be combined, offering up to $25,000 in financial support, helping first-time buyers overcome the challenges of initial home purchase costs.
In addition to financial assistance, VHFA’s Mortgage Credit Certificate (MCC) provides long-term savings for homeowners. The MCC allows eligible borrowers to claim an annual federal tax credit of up to $2,000, equivalent to 50% of the mortgage interest paid each year. This benefit remains in effect as long as the homeowner resides in the property and retains the original mortgage, providing valuable tax relief over time.
VHFA programs are tailored to assist those who meet specific qualifications, ensuring resources reach families and individuals who need them most. Key eligibility requirements are as follows.
Household income must not exceed $140,000 for a 1-2 person household, or $170,000 for a 3-or-more person household. A household is defined as two married individuals and their dependents.
A minimum credit score of 640–680, depending on the program, is required.
For down payment assistance, buyers must not have owned a home in the past three years unless purchasing in certain Vermont counties, and at least one borrower must complete an approved homebuyer education course.
VHFA programs are designed to make the dream of owning a home attainable for a wider range of Vermont residents. These programs pair seamlessly with a variety of 30-year purchase mortgages, including options from conventional FHA, USDA, and VA.
Prospective homebuyers interested in VHFA programs are encouraged to contact a VHFA participating lender to determine eligibility by visiting www.vhfa.org/homebuyers/lenders.
With its combination of affordable rates, financial assistance, and tax benefits, VHFA provides a vital resource for current and about-to-be Vermont residents seeking to navigate the homebuying process. By addressing common barriers to homeownership, VHFA helps families take the next step toward stability and financial independence.