VI Slice gap-financing program has helped dozens but faces funding limit

The Virgin Islands Economic Development Authority told the Legislature that its VI Slice moderate-income homeownership program has approved dozens of gap-financing awards for first-time buyers but faces an imminent funding limit.

EDA Director Wayne Biggs said VI Slice, an $8 million American Rescue Plan Act grant administered by the authority, provides supplemental financing to bridge the gap between a primary mortgage and total project cost. The authority reported that a substantial pipeline of applications has already committed most of the allocation.

"We anticipate at this level that we will run out of VI Slice funding by the end of calendar year 2025," Biggs said during testimony. He added the program has proven popular among borrowers and local lenders.

Program details and outcome

- Application and approvals: As of the August hearing, EDA reported 88 submitted VI Slice applications totaling roughly $9.3 million in requested gap financing. Sixty-five applications were approved, requesting about $6.8 million in gap funds; 61 of those approved transactions have closed and drawn funds.

- Loan mix: Of the approved files, EDA said 15 approvals were for new-construction transactions, 10 were for purchase-and-rehab scenarios and 40 were for outright purchases.

- Participating lenders: Several local lenders have originated transactions under the program, including Banco Popular, Capital Mortgage Services, USDA Rural Development, Oriental Bank and others. EDA said it is working to expand participating lenders and construction-financing options but that construction financing remains a constraint in some deals.

Why it matters: VI Slice subsidizes moderate-income homebuyers who cannot close a transaction using market-rate financing alone. The program converts the second-party gap loan to a grant if the buyer occupies the home for a 10-year period.

What lawmakers asked

Lawmakers pressed EDA on how many applications remained in the pipeline and what additional funds would be needed to meet demand. Biggs said the program had helped more than 60 households close and that the authority would need additional appropriations to keep accepting new applications beyond the current pipeline.

Bottom line

VI Slice has produced measurable closings and some new construction but is a finite, time-limited ARPA allocation. Program officials urged prospective applicants to work with participating lenders and for the Legislature to consider supplemental funding if it wants the program to reach more households.