Vermont State Housing Authority warns Section 8 uncertainty; rental-arrears program may run out by September 2025

Vermont State Housing Authority leaders told the House Human Services Committee that federal uncertainty for the Housing Choice Voucher (Section 8) program and limited state funds for eviction prevention are pressing issues for landlords, tenants and homeless-service providers.

Kathleen Burke, executive director of the Vermont State Housing Authority (VSHA), and Caprice Hover, special project manager for VSHA, described a two-track problem: federal subsidy funding that may be prorated this year, and state-level programs that manage eviction prevention, landlord relief, mobile-home repair and new mobile-home infill.

Federal Section 8 outlook and risk to vouchers

Burke said guidance from the U.S. Department of Housing and Urban Development in December indicated two congressional proposals would likely fund the Housing Choice Voucher program at between roughly 88% and 97.5% of need. If funding lands near 97.5%, Burke said, public housing authorities across Vermont could likely work through that scenario while halting issuance of new vouchers and relying on natural attrition; at the lower estimate (~88%), authorities could be forced to remove currently assisted families to align with the available budget.

VSHA's portfolio and homelessness-related vouchers

VSHA administers the largest Section 8 portfolio in Vermont. Burke told members the agency serves approximately 4,400 Vermonters under the Housing Choice Voucher program and other targeted voucher programs, and that 60% of new vouchers issued last year went to people who were homeless (about 423 vouchers in that cohort). She and staff cautioned that a proration at the lower end of congressional funding proposals could force painful choices and asked legislators to consider federal funding risk when setting state priorities for supportive services.

State eviction-prevention programs and landlord relief

Caprice Hover described VSHA's role implementing a legislative rental-arrears eviction-prevention program funded with a $2.5 million appropriation that VSHA received in December. The program requires a summons and complaint to be filed (it is targeted at curing evictions for tenancies the agency judges to be sustainable) and combines back-rent payments with allowance for legal fees and, where needed, security deposits or vacancy-loss payments tied to rapid re-leasing.

Hover reported the program had received 53 requests and resolved eight evictions to date. She said the average approval to cure an eviction (inclusive of legal fees and damages) was about $9,000. Based on current usage, VSHA forecasted the $2.5 million authorization would be depleted in September 2025 and asked the committee to consider additional appropriation to maintain the program into the next fiscal year.

Integration of case management and federal service dollars

Burke and VSHA staff described multiple funding streams that support case management and supportive services: HUD's Continuum of Care (CoC) grants, Shelter Plus Care, HOPWA (Housing Opportunities for Persons With AIDS) allocations, and program-specific funds tied to certain voucher types (for example, family unification, foster youth, and veterans programs). VSHA said the funding streams each carry different service standards and reporting requirements, which can create a fragmented landscape for supportive services even when outcomes evidence suggests case management improves housing stability. The agency highlighted an "Away Home" pilot that pairs service grants (about $1.2 million for service dollars) with project-based rental assistance for 66 dedicated homeless units (about $700,000 in rental-assistance value) as an example of a functioning collaboration between rental assistance and services.

Other state programs VSHA administers

VSHA staff also described landlord-relief policies (vacancy-loss and damage/loss coverage), a Manufactured Home Improvement and Repair (MIR) program and a new rapid-response mobile-home infill effort that aims to use identified vacant lots to increase homeownership in high-need areas. VSHA said it has identified 99 lots for mobile-home infill and is standing up the program to place new homes on those lots; it also reported a first closing under that program.

Legislative requests and next steps

VSHA asked the committee for two items: (1) an additional $2.5 million to continue the rental-arrears eviction-prevention program through the next fiscal year, and (2) attention from lawmakers to the potential federal Section 8 funding proration and the downstream effect on demand for state-funded supportive services. Committee members asked for a fiscal estimate of the dollar gap that a federal proration would create for the state's portfolio; VSHA staff agreed to provide an analysis.

Ending

VSHA offered to return with additional data and analysis on the potential fiscal gap under federal proration scenarios and said it would continue to coordinate with local homeless-service partners to avoid duplication and to maximize case-management outcomes. The committee scheduled no votes during the session and plans to follow up with VSHA for requested figures and clarifications.