Vermont Economic Development Authority asks lawmakers to let it finance market-rate multifamily projects

The Vermont Economic Development Authority asked the Economic Development, Housing & General Affairs committee to expand its statutory lending authority to permit participation in financing market-rate, five-plus-unit multifamily projects when requested by a lender.

The request, presented by VEDA staff to the committee, was framed as a response to statewide housing shortfalls and as a way to increase lender capacity for projects that might not otherwise proceed. VEDA officials reviewed the authority’s recent activity, noting it borrows in capital markets and issues commercial paper rather than relying primarily on ongoing appropriations.

VEDA told the committee that during fiscal year 2025 it closed roughly 173 loans totaling about $61.5 million. The presenter said agriculture comprises roughly $70 million of VEDA’s active portfolio and that the broader commercial and program portfolios together were about $280 million as of June 30, 2025. VEDA also described its role implementing a state small-business credit initiative using ARPA funds for venture investments, citing roughly 30 investments totaling more than $4.5 million and two exits that allowed reinvestment into the funds.

Why the change: VEDA argued some developers and lenders prefer not to work with the Vermont Housing Finance Agency (VHFA) on market-rate components of larger projects. The authority’s proposal would allow VEDA to participate in joint financing of multiunit commercial housing (five or more units) ‘‘when requested by said lender,’’ rather than supplanting VHFA’s role. VEDA emphasized it would continue to underwrite each proposal and would not automatically approve loans simply to fill a perceived gap.

Lawmakers pressed VEDA on duplication and oversight. Committee members asked whether adding another quasi-public lender would create unnecessary overhead or push projects away from VHFA. VEDA responded that the proposal was intended to be additive — an additional option when VHFA or private lenders do not participate — and that proposed language would defer to VHFA on applications eligible for both agencies. VEDA also said some transactions (for example, senior housing or other niche markets) have proceeded previously without VHFA involvement and that VEDA’s participation could help close deals otherwise stalled.

Context and scale: The presenter cited a statewide estimate of 7,500 new housing units needed; the Vermont Housing Finance Agency’s calculation, as described to the committee, suggested roughly 4,000 of those would appropriately require state-supported, income-restricted programs while about 3,500 would be market-rate. VEDA framed the statutory change as a limited tool to address part of the market-rate shortfall. VEDA repeatedly stressed that it would act only when a lender requests VEDA’s participation and that standard underwriting standards would still apply.

Administrative request: Separately, VEDA asked the legislature to merge the Vermont Agricultural Credit Corporation into VEDA as a subchapter of VEDA’s statute, describing the change as an administrative consolidation while maintaining the authority’s agricultural lending commitments.

Next steps: Committee members said they would use the proposed language while drafting the committee housing bill and would introduce the bill soon for consideration. The committee recessed for a brief break and planned to continue deliberations when it reconvened.