VHFA asks for five‑year extension of tax‑credit sales to sustain down‑payment assistance; committee weighs landlord data, short‑term rental tax concerns

The House Ways & Means committee spent a substantial portion of its March 18 meeting on H.479, a housing bill that would extend and modify state tax‑credit tools VHFA uses to finance down‑payment assistance, create a first‑generation homebuyer grant, and make other tax and administrative changes related to housing.

Maura Collins, executive director of the Vermont Housing Finance Agency (VHFA), told the committee VHFA operates a down‑payment assistance (DPA) program funded in part by proceeds from the sale of a multiyear state tax credit. VHFA sells five‑year tax credits on the market (modeled after the federal low‑income housing tax credit); selling $1.25 million in credits generates roughly $1.1 million in cash at current market rates, staff said. VHFA asked the committee to authorize continued sale of the DPA tax credit for an additional five‑year period beginning in FY27 to keep the DPA program solvent and avoid curtailing assistance. VHFA also requested a standing authorization to issue a smaller volume of five‑year tax credits to fund a permanent first‑generation homebuyer grant program; JFO and VHFA testimony described the first‑generation grant as non‑repayable assistance to first‑generation homebuyers previously funded by one‑time appropriations.

VHFA’s data presentation described the DPA product as a 0% deferred second mortgage that is repaid when the property is refinanced or sold. DPA awards are combined with VHFA mortgage products and are intended for first‑time buyers within income and purchase limits. VHFA has increased the DPA maximum over time to match market prices; the agency currently offers up to…