VHFA asks House committee to extend sale of state housing tax credits to sustain down-payment assistance

Maura Collins, executive director of the Vermont Housing Finance Agency, told the House Committee on General & Housing on Feb. 7 that VHFA needs the Legislature’s permission to keep selling a portion of the state housing tax credits for an additional five years so the agency can maintain its down-payment assistance (DPA) program.

Collins said the request would allow VHFA to keep selling the same volume of tax credits through a five-year credit structure rather than curtailing sales when a statutory sunset arrives. "What I'm here to do is to ask you to... consider allowing VHFA to sell the same number of tax credits for an additional five years for the same program with no changes," she told the committee.

The ask matters because VHFA uses proceeds from annual tax-credit sales plus repayments on prior DPA loans to fund the program. Collins said repayments have fallen sharply since mortgage interest rates rose, reducing the program’s revolving funds. She said that dynamic, which she described as a decline in repayment “velocity,” has forced VHFA to lower its maximum DPA award this summer from higher pandemic-era levels back to $10,000 unless statutory authority is extended or other program changes are made.

VHFA described how the DPA works: borrowers who qualify for a VHFA mortgage may…