Treasurer says 10% investment program has funneled $80M into housing projects; highlights local projects

The State Treasurer described a program that permits investing up to 10% of the state’s cash‑on‑hand in economic development projects and said the office has used that authority to finance roughly $80 million across about 32 housing projects in recent years. The Treasurer told the Senate Appropriations Committee on Feb. 21 that the program provides low‑interest financing—often 1% to 2%—to reduce project costs and help deals pencil during periods of high interest rates.

The Treasurer highlighted a $5 million loan through the Vermont Economic Development Authority that helped the Vergennes Grand proceed after pandemic‑era cost increases raised the project’s budget by an estimated $5 million; the project will create 65 units (including senior assisted living units serving Medicaid‑eligible residents) and is expected to open with a ribbon cutting next month, the Treasurer said. The Treasurer said projects financed through the 10% program typically receive partial capital from the treasurer’s office as one piece of a broader funding stack and that the office has not historically exceeded about $8 million on a single project.

The Treasurer also described an $8 million partnership with Heritage Family Credit Union and the city of Rutland to provide capital for downtown infill and rehabilitation projects; the Treasurer said roughly $6.5 million of that pipeline is already committed and the program could support about 50 new downtown units in Rutland. Other investments cited included $300,000 for Reed Commons (33 senior units) and an $8 million investment for an 87‑unit workforce housing project in St. Albans.

The Treasurer said the office makes these loans at below‑market rates to be counter‑cyclical when private market financing is expensive and to support housing development that otherwise would not proceed at higher market rates. The Treasurer said loan terms vary by project (some short, some 20 years), and that the office will review the portfolio in the coming months and report results to the legislature.

On climate and disaster financing, the Treasurer described a 2.5% “climate facility” that has been used as a short‑term bridge for municipalities recovering from flood events in 2023 and 2024; once repaid, the Treasurer said the fund could be used for climate resilience or green energy projects. The Treasurer said the bond bank partners on these bridge loans and that the bond bank waived administrative fees for flood recovery loans.

Committee members asked about program limits and oversight; the Treasurer said statute establishes the advisory committee role, the treasurer’s office leads the program, and the committee’s recommendation has been followed to date. The Treasurer said the decision to deploy capital is a consulting process with the advisory committee, the bond bank and local partners.