Vermont Housing Improvement Program

VHIP 2.0

The Vermont Housing Improvement Program (VHIP) has relaunched as VHIP 2.0!

The Vermont Housing Improvement Program (VHIP) 2.0 provides grants and 0% interest loans up to $50,000.00 per unit to property owners to create affordable rental units. Eligible projects include the rehabilitation of Unoccupied Units, Tenant Occupied Units facing code violations, New Unit Constructions and Accessory Dwelling Units (ADUs). This program is designed to further increase the supply of safe and affordable housing across Central Vermont. Downstreet administers VHIP for Lamoille, Washington and Orange Counties.

Since January 2022, Downstreet's Homeownership Center has helped 21 property owners receive grants through VHIP totaling over $1.4 million. See the full list of VHIP recipients.

Read our VHIP Success Story.

About the Program

What can you do with VHIP 2.0 funding?

VHIP 2.0 offers grants or forgivable loans to:

Rehabilitate existing vacant units
Rehabilitate structural elements effecting multiple units, such as the roof of a multi-family property
Develop a new Accessory Dwelling Unit (ADU) on an owner-occupied property
Create new units within an existing structure
Create a new structure with five or fewer residential units
Complete repairs necessary for code compliance in occupied units (only eligible for 10 year forgivable loan)
Rehabilitation projects can include updates to meet housing codes, weatherization, and accessibility improvements, of eligible rental housing units.

How much funding are projects eligible for?

Based on the type of project, property owners are eligible to receive up to:

$30,000 per unit for rehab of 0–2-bedroom units
$50,000 per unit for rehab of 3+ bedroom units, structural elements impacting multiple units*, new unit creation, or creation of Accessory Dwelling Units (ADUs)

*For structural elements affecting multiple units, applicants can apply for $50,000 per property and must identify one unit in the building that the Rental Covenant will be placed on. Participants may opt for either the 5-year grant or 10-year forgivable loan tract.

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 materials. For example, a participant who receives an award of $50,000 will be required to provide a $10,000 match.

Fair Market Rent: Participants are also required to sign a rental covenant agreeing to charge at or below HUD Fair Market Rent (FMR) or voucher amount for the length of the agreement (5 or 10 years, learn more about these options here). Participants will be required to submit a yearly recertification form to ensure they are in compliance with the program requirements. Please see the section about FMRs on the ACCD VHIP 2.0 webpage.

Landlord Education: VHIP 2.0 applicants must watch 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 here to view - link to come from VLA]. The online, self-paced Fair Housing training is provided by CVOEO. It includes an overview of state and federal anti-discrimination requirements, examples of illegal housing discrimination and potential penalties, access requirements for people with disabilities, including reasonable accommodations and reasonable modifications, and best practices for housing providers. This training will be confirmed through completion of a short quiz. Please click here to register. You will be asked to create an account on the Ruzuku learning platform, then you’ll have immediate access to the training. If you experience any problems or have questions, please contact CVOEO at classcoord@cvoeo.org or 802-660-3455 ext. 205.

Tenant Selection: VHIP 2.0 participants have the right to select their tenants. However, the tenants they select must meet the program requirements, based on if they are enrolled in the 5- or 10-year tract (see next section below). For properties enrolled in this program, the property owner may not require a credit score greater than 500, and participants are limited to charging no more 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 rent, etc. Additionally, property owners must cover the cost of running background checks on potential tenants. Property owners are also required to accept any housing vouchers that are available to pay all, or a portion of, the tenant’s rent and utilities. Additionally, property owners must accept paper applications for tenants with limited internet access.

Out-of-State Owners: Out-of-State owners are required to identify a property manager located within 50 miles of the units to ensure a local, responsible party can manage the property in the absence of the 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 period for which the property owner must charge at or below HUD Fair Market Rent for the enrolled units (5 v 10 years)
The 5-year grant option comes with additional tenant selection requirements to rent to a household exiting homelessness

To learn more specifics about these two options, please visit ACCD's VHIP 2.0 webpage.

How will grant applications be evaluated?

Shovel-ready status: is it feasible to complete the full scope of the rehab and unit leased up by the deadline (18 months).
Past experience and readiness to work with the Continuum of Care and Coordinated Entry Rental application process (if applicable).
Is the project brining long-term vacant units back on line including improvement of blighted buildings and apartments with substantial code-violations.
Willing to rent at the HUD Fair Market Rent for five years including having a Housing Subsidy Covenant on the building and providing the LC-142 form to the Agency of Commerce and Community Development annually.
Property taxes and sewer/water bills are current.
No federal or state tax liens and property is not in foreclosure.

How to Apply

We are not currently accepting applications for VHIP. For future updates about the program, please sign up for our newsletter.

Resources and FAQs

VHIP 2.0 Resource Guide for Property Owners – This in-depth guide walks property owners through every step of the VHIP 2.0 process, from determining if the program is a good fit for your project, how to apply, payment disbursement, maintaining program requirements, to selling a VHIP 2.0 property

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