S.127 creates Vermont Infrastructure Sustainability Fund to back municipal infrastructure for housing

Committee staff told the House General & Housing Committee on April 3 that S.127 proposes a Vermont Infrastructure Sustainability Fund administered by the bond bank in coordination with the Department of Housing and Community Development.

Cameron Wood said the fund would provide low‑interest loans or bonds to municipalities to expand infrastructure capacity tied to housing projects. Eligible activities listed in the bill include engineering, planning, design, bid specifications and construction for municipal water and wastewater systems and other infrastructure investments that directly support housing development.

Nut graf: The fund is structured as a revolving facility that requires projects to demonstrate a direct link to housing production or reserve capacity for new housing, municipal ownership or operation over the project’s useful life, and a financing plan. The Senate language originally included the Vermont Community Index as a ranking factor; that criterion was removed in committee discussion.

The bill requires application materials to demonstrate project readiness and financing for project completion. Awards would include loan terms, amortization, maximum interest rates, potential forgiveness provisions, and covenants or security. The legislation also contemplates setting maximum loan amounts and terms and establishing necessary security and covenants to protect the fund’s revolving status.

Ending: Staff said additional details and program guidelines will be developed by the bond bank and the Department of Housing and Community Development, and committee members asked staff to coordinate with those agencies on scoring criteria and the program’s prioritization framework. No action was taken during the walkthrough.