Vermont Housing Improvement Program
Overview
The Vermont Housing Improvement Program (VHIP) provides rental property owners up to $50,000 per unit to cover the costs of bringing vacant and blighted rental units up to Vermont Rental Housing Health Code guidelines or to create new Accessory Dwelling Units (ADU). This program is designed to address two critical issues in the state: the declining quality of rental units, and the homeless assistance programs that often struggle to find suitable housing for their clients.
This resource guide provides information on every step of enrolling in the VHIP program, from deciding if VHIP is the right fit for your project, submitting an application, completing the project, to maintaining compliance with the program requirements once your unit is complete.
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.
VHIP Program Details
- VHIP Round 2 per unit funding caps: up to $30,000 per unit up to two bedroom units, or up to $50,000 per unit for three or more bedroom units and the creation of Accessory Dwelling Units (ADUs).
- Existing units must be vacant for a minimum of 90 days before the property owner can apply to VHIP.
- To be eligible for the program, the property owner must be current on their property taxes and mortgage payments.
- Property owner is required to contribute at least a 20% match of the grant funds prior to first grant disbursement. An “in-kind” match or defer match timeline may be approved at the discretion of the Homeownership Center overseeing project management.
- VHIP requires property owners to commit to providing housing to households exiting homelessness, households that are working with an Immigrant or Refugee Resettlement Program, or low income tenants.
- Property owners are required to work with a Coordinated Entry Lead Organization or an Immigrant or Refugee Resettlement Program to find suitable renters who have experienced homelessness or displacement. This engagement shall continue at unit turnover for a minimum of 5 years.
- If households meeting these criteria are not available to lease the unit to, the property owner may petition the Department of Housing and Community Development (DHCD) to lease the unit to a household with an income equal to or less than 80 percent of the Area Median Income (AMI) for a minimum of 5 years.
- For newly created Accessory Dwelling Units as defined in 24 V.S.A. § 4412(E), property owners are exempt from seeking homeless tenants through a Coordinated Entry Lead Organization or an Immigrant or Refugee Resettlement Program.
- All units assisted must be rented at or below HUD Fair Market Rents (FMR) for the appropriate County (published annually) or at a rate allowed by a recognized housing assistance voucher for at least five years and property owner must sign a Housing Affordability Covenant outlining this.
- Alternative tenant selection processes may be considered for approval by DHCD during the 5-year program covenant timeframe.
- Grant funds are considered taxable income.
- Project scope may be reviewed and altered if the property is on or eligible for the State or National Historic Register.
- Completed units must comply with the Vermont Rental Housing Health Code and local ordinances.
Current HUD Fair Market Rents for Washington/Lamoille/ Orange Counties:
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.
- 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 now accepting applications for the Vermont Housing Improvement Program. To apply, please click the appropriate button below.
