$15 million CTE revolving loan fund financing student-led construction and blight-reuse projects, lenders say

Department and nonprofit lenders told the Senate Economic Development, Housing & General Affairs Committee that a $15 million revolving loan fund established by the Legislature to support construction-focused career-technical education projects is financing student-led rehabilitation and new-construction projects in several Vermont communities.

The fund: Gus Sealy (Vermont Housing & Conservation Board) and Sarah Phillips (Vermont Community Loan Fund) said the fund was capitalized with $15 million from the Education Fund and launched in 2023 to provide patient, low-cost financing for projects that expand hands-on learning opportunities for Career and Technical Education (CTE) students in construction trades.

Loan terms and purpose: Sarah Phillips said the program provides low-cost, flexible loans (statute and program guidance require loans to expand CTE student learning and may allow for partial forgivability tied to student wages and instructor costs). The program accepts borrowers that are CTE centers or community partners and can be used for acquisition, predevelopment, construction and site work. Phillips said loans are available up to $650,000 and that the program was designed for projects that can accept a slower, education-focused construction timeline.

Projects and partnerships: presenters and local partners described six active loans and several projects that illustrate the fund's use: - Newport: Newport Downtown Development and North Country Career Center partnered to acquire and redevelop a blighted downtown parcel, with the CTE center providing student labor and instruction on-site. Presenters said the project began with acquisition and environmental assessment work, and the city or downtown development nonprofit has served as borrower for early phases. - Randolph: A new duplex on Central Street developed in partnership with Central Vermont Habitat for Humanity and Randolph Technical Career Center. Presenters said approximately 35 students have participated; the project uses panelized building systems supplied by Bensonwood and combines high-school curriculum with on-site work. - Middlebury and Tiny Homes: A partnership with Homes First Vermont and the CTE center built a tiny home on-site as part of a student curriculum; the loan supported construction cash flow and materials. - Brookmeade Circle (Hartford): A CTE-owned parcel and single-family home build to maintain an established CTE construction sequence; presenters noted the loan helped maintain the summer-work capacity of the program and make a home affordable to households in a broad AMI range. - St. Albans: The city used initial predevelopment financing for demolition/abatement and plans to rebuild a single-family home with CTE student participation.

Why it matters: witnesses said the loans allow students to participate in full-life-cycle construction projects — planning, permitting, rough-in, finish work and site remediation — which would be difficult to stage with ordinary construction timelines and commercial financing. Program leaders and school staff described the learning value of multi-year projects and said the loans can be partially forgiven for student wages so that the cost of learning does not meaningfully increase the resale price of affordable homes.

Program status and numbers: Sarah Phillips said the loan fund launched in 2023, has six active loans and has held hundreds of outreach conversations with CTE centers and partners. Gus Sealy (VHCB) and Philllips noted that many CTE centers prefer to work with community partners rather than accept loans directly, which affects borrower structures. Presenters recommended continued legislative oversight and collaboration with the Agency of Education and local partners to scale successful models.

No vote was taken during the update. Several committee members accepted invitations to visit project sites and asked staff to circulate project materials and schedules.