Nonprofit housing providers told the joint House General and Housing Committee and the Senate Committee on Economic Development, Housing, and General Affairs that federal funding cuts and program uncertainty are already affecting the pipeline for affordable housing and the operations that keep existing units habitable.

Nancy Owen, president of Evernorth, said the loss or reduction of project-based Section 8 vouchers can directly reduce the debt capacity for a development, sometimes by hundreds of thousands of dollars. "Project based vouchers really can unlock an entire capital stack," Owen said, describing a predevelopment example in Hinesburg called Riggs Meadow: a proposed 36-unit project that originally included a contract for 12 project-based vouchers and was scheduled to start construction in April 2026. Owen said that, at a 6% mortgage rate over 20 years, the voucher-backed revenue allowed lenders to underwrite roughly $2,850,000 in debt versus about $2,000,000 without the vouchers — an $850,000 permanent financing gap.

The financing shortfall has knock-on effects for private investment. Owen said Evernorth has raised and deployed roughly $140 million in Vermont over the last four years as a tax-credit syndicator, and investors will only commit if projects reach the closing table. She cautioned that even though the federal tax bill delivered higher LIHTC (low-income housing tax credit) allocations and improvements to Fannie and Freddie investment capacity, "there's not enough gap financing to get us to a fully financed 4% deal" without state support from programs such as the Vermont Housing & Conservation Board and VHFA.

Champlain Housing Trust emphasized the dual impact of development and tenant services. Michael Lanti, director of community relations, said the trust leased 94 apartments last year, with more than one in four units housing people who were formerly homeless; the organization now shelters and houses more than 500 people who were formerly homeless. Lanti told the committees that Champlain records roughly $37–38 million in annual rent receivables and that about $12 million of that total comes from vouchers. He also said his group is already planning for the short- and medium-term effects of cuts to SNAP and other benefits: "33% of our tenants, according to our survey, feel food insecurity." Lanti added that immigration enforcement activity has slowed some construction crews because workers do not report for shifts, which affects schedules.

Angie Harbin, executive director of Downstreet Housing and Community Development, gave a regional view of who needs subsidy in Central Vermont. Downstreet serves Orange, Washington, and Lamoille counties and said roughly 13,000 renters live in those three counties; the organization’s income-range work covers about 80% of that population. Harbin outlined four income buckets (under $20,000; $20–35,000; $35–50,000; $50–75,000) and explained that many households in the $35–50k group are essential local workers who nonetheless often need subsidies. Downstreet started construction on 69 units this year, Harbin said, and 28 of those units (about 40%) include project-based subsidies. "If we don't have those subsidies, we don't have affordable rents," she told committee members.

Witnesses also flagged short-term operational and programmatic disruptions tied to federal uncertainty. Evernorth noted that the CDFI Fund paused awards during the federal shutdown, delaying new-market tax credit awards that would support community development projects. Contractors and developers are also managing tariff volatility; Owen gave an example where elevator import tariffs varied between $6,000 and $17,000 across similar installs, forcing contractors to build contingency into bids and increasing costs.

Providers urged state action to shore up the financing stack and preserve ramps out of homelessness. Recommended steps included reliably funding state gap programs (VHCB, VHFA), anchoring successful state pilot programs such as VHIP into base budgets, and directing technical and financial support to keep projects financeable during the current market and federal uncertainties.

Committee members and witnesses agreed the immediate consequence of major voucher reductions would not be theoretical: projects could fail to reach closing, existing properties could become underwater on operating budgets, and nonprofits could shift staff time from development and supportive services to crisis response. The committees signaled they will continue hearings and seek follow-up data on project-level exposures and the scale of voucher-dependent units statewide.