Vermont Opens $25 Million Housing Loan Round; Proposals Due Sept. 4

Vermont has opened a new $25 million round of low-interest financing for housing, job creation and affordability projects statewide. Proposals are due September 4, 2026.

State Treasurer Mike Pieciak announced the round July 21 through the renamed Invest in Vermont program. The initiative uses the state’s local investment credit facility to make loans at below-market interest rates. The $25 million is available lending capacity, not a direct state appropriation or grant, and projects in this round have not yet been awarded funding.

What changed

The program was formerly known as “10% in Vermont.” Act 179, created through S.328 and signed by Gov. Phil Scott on June 18, increased the treasurer’s authority to establish the credit facility at up to 12.5% of the state’s average cash balance, up from 10%.

The enacted law gives the treasurer more room to place state cash into qualifying loans while requiring the facility to operate on terms consistent with prudent investment principles and state investment guidelines. The legislation also changed the program’s statutory authority; the new lending round is an administrative financing opportunity, not a new General Fund appropriation of $25 million.

Statewide reporting by VTDigger and WPTZ said the additional capacity is intended to help housing and economic-development projects move forward at lower financing costs.

How the financing works

Invest in Vermont does not distribute the $25 million as cash grants to developers. It provides loans through the treasurer’s local investment credit facility. The Joint Fiscal Office fiscal note said loan rates generally range from 1% to 2.5%, depending on the loan term and amortization.

The facility is tied to the state’s average cash balance, so the amount ultimately available can vary with the state’s cash position. The fiscal note reported an average cash balance of about $1.6 billion in fiscal year 2025, after the balance reached about $2.2 billion in fiscal year 2023 as federal pandemic-era funds increased state cash holdings.

Using state cash for lower-interest loans can reduce borrowing costs for projects that might otherwise be difficult to finance. The arrangement also has a potential fiscal tradeoff. The fiscal note estimated that increasing the lending cap to 12.5% could result in up to $600,000 in forgone interest income in future fiscal years. That is a maximum potential estimate, not a confirmed budget loss, and the note said it would have no fiscal impact in fiscal year 2027.

Who may apply

The July 21 request for investment proposals encourages applications from nonprofits, instrumentalities of the state, municipalities and similarly situated organizations. Multi-partner applications are also allowed, according to the treasurer’s request for proposals and the announcement published by Vermont Business Magazine.

The round is aimed at housing and other projects that support economic activity and affordability. The program has previously supported housing for working families, older Vermonters and people exiting homelessness.

One example is Fox Run Apartments in Berlin, a 30-unit development with affordable and market-rate apartments and units reserved for Vermonters leaving homelessness. The project received $1.2 million through the program, according to the July 21 announcement.

Prior program results should not be confused with commitments from the new round. The treasurer’s announcement said more than $130 million had been invested through Invest in Vermont and that those investments had been associated with nearly 1,700 housing units, nearly 200 permanent jobs and more than $600 million in outside capital. Those figures describe the program to date, not guaranteed results from the additional $25 million.

What it could mean for residents

Lower-cost financing can help developers close funding gaps, reduce carrying costs and move projects from planning toward construction. Potential beneficiaries include communities seeking rental housing, workforce housing, senior housing or projects that combine affordable and market-rate units.

For renters and homebuyers, however, the immediate effect is limited. The $25 million is a lending pool, not a guarantee that a specific number of homes will be built or that rents and home prices will fall. Those outcomes will depend on which proposals are selected, how much private financing they attract, whether projects receive permits and whether construction is completed.

The program’s statewide reach means communities outside Vermont’s largest population centers may compete for financing. Residents should watch for announcements identifying loan commitments, project locations, expected unit counts, affordability requirements and construction schedules.

What happens next

Eligible applicants must submit proposals by September 4, 2026. The state must then review the submissions and determine which projects, if any, receive financing. Until those commitments are announced, the $25 million remains available capacity rather than awarded project funding.

The expansion also creates an oversight question for lawmakers and the public: whether the additional lending authority produces measurable housing construction and affordability benefits that justify the potential loss of interest income to the state.

Sources

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