When it comes to purchasing your first home, there many programs and incentives that organizations offer to help mitigate costs. If you are a first time home buyer in Vermont, it can be hard to find the right program that will fit your needs. Some programs will help with mortgage costs, are dependent on the location you choose, or have specific requirements that may or may not fit your home buying needs. To help you in your first foray into finding a new home, here are four organizations that provide a variety of programs for first time home buyers in Vermont.
Vermont House Finance Agency
VHFA is the most robust program available to potential homeowners in Vermont, they are dedicated to helping new and established residents become homeowners. They believe that if people find affordable ways to purchase a home, it will create the thriving communities that Vermont needs. VHFA facilitates three different programs, and they are flexible enough that you can possibly combine these programs with other organizations’ incentives and increase the affordability of your new home. Some incentives that VHFA offers include lower interest rates, 30 year fixed rate mortgages, locked in interest rates that do not change, and lower monthly mortgage insurance payments. They have programs that will provide up to $5,000 towards either closing costs or a down payment. Often there are unknown or hidden costs that come with finalizing the purchase of a new home. One of the costs associated with home buying, is a Property Transfer Tax that is due to the State of Vermont any time a home is purchased. VHFA has a program that will help with up to $825 towards the Property Transfer Tax. If you are planning on purchasing a home outside of Chittenden County, they have products that can help to finance up to 100% of the costs of purchasing a new home. They also have two programs called MOVE and MOVE MCC that are offered to any homebuyer in most counties, but are only offered to first-time homebuyers in Addison, Bennington, Chittenden, Grand Isle, and Windsor Counties. It helps to know what county you will be buying in and if there are any programs that are county dependent. There is also Mortgage Credit Certificates that are annual tax benefits, and can save you money upfront and over the course of paying off your home loan. VHFA has a wide variety of programs available, and it is so successful in helping Vermonters buy a home, that one in eight homes in Vermont are financed through VHFA.
Champlain Housing Trust
This program is a Shared Equity Program available in Chittenden, Franklin, and Grand Isle counties. Started in 1984, it is based on the idea that CHT and the homeowner share the equity in a home. They way it works is, CHT will have a home that they have purchased and will then sell to a new buyer, with the understanding that CHT owns the land and the homeowner owns the dwelling. Once the homeowner decides to sell or move on, they will sell the home back to CHT and retain a portion of the appreciation in the home’s value. This is in exchange for lower mortgage amounts, and allows affordable home buying options for people with lower incomes. Generally, buyers choose from a pool of homes that CHT has already purchased. Yet from time-to-time, the Trust receives funding to invest in new homes. If that option is available, buyers can choose a home on the open market and apply to have it purchased with Champlain Housing Trust. CHT also works to help educate prospective homeowners through their Home Education Programs.
Rural Development by the U.S. Department of Agriculture
The USDA has a Rural Development Program that fosters homeownership for low and very low-income applicants looking to purchase a home in a rural area. The program considers a rural area to include locations that have a population smaller than 35,000. The entire state of Vermont has just over 600,000 people, and most communities average 3,000 to 4,000 people, therefore much of Vermont is considered within the rural development requirement. Known as the Section 502 Direct Loan Program, it provides a 33-year mortgage and payment assistance to increase repayment ability. The funds can be used to build, repair, move, or prepare a site for a home. Typically, no down payment is required with the rural development assistance, which will increase the potential for a buyer’s success in purchasing a home. The Rural Development Program also has the potential to be combined with some of the VHFA programs, increasing the potential incentives to help you purchase your new home.
NeighborWorks of Western Vermont
NeighborWorks is a regionally specific program that is committed to the revitalization of areas in Western Vermont. It includes help for prospective buyers in Addison, Bennington, and Rutland counties. They provide both loans and grants for down payment assistance, which can be up to $40,000 or 20% of the purchase price (whichever is the lesser value). This down payment program can also be combined with the VHFA ASSIST loan to maximize cost savings. The down payment grant program is provided through the Vermont Housing and Conservation Board’s HOMELAND Program. Once a buyer receives a grant, they do not pay it back, but a portion of the equity will stay with the home once it is sold again, allowing for the next homeowner to also have similar grant funding. NeighborWorks also has a program that is dedicated to revitalizing the community around Northwest Rutland and has specific incentive programs for residents interested in purchasing in that area.
2 Point Highlight
It helps to know what county you will be buying in and if there are any programs that are county dependent.
The entire state of Vermont has just over 600,000 people, and most communities average 3,000 to 4,000 people, therefore much of Vermont is considered within the rural development requirement.
