Vermont officials say VHIP has returned hundreds of vacant units to service but warn staff and funding are strained
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Summary
Housing officials told a legislative committee Feb. 13 that the Vermont Housing Improvement Program (VHIP) has completed over 844 units and funded 1,172 more at about $40,000 in public dollars per unit, but staff capacity and recurring funding are limiting expansion.
Sean Gilpin, housing director in the Department of Housing and Community Development, told a legislative committee Feb. 13 that the Vermont Housing Improvement Program (VHIP) has completed more than 844 rental units and funded about 1,172 additional units that are still under construction, using an average of roughly $40,000 in public dollars per unit.
Gilpin said the program started as a COVID-era rehousing and recovery effort and has evolved into a set of grants and forgivable loans intended to bring vacant or code‑deficient rental units back online for households exiting homelessness or at risk of losing housing. "We've completed over 844 units, throughout the state at an average cost of public dollars of $40,000 per unit," he said.
The program uses a two‑tiered per‑unit grant structure: up to $30,000 per unit for one‑ and two‑bedroom units, and up to $50,000 for larger units. Per Gilpin, grants and forgivable loans are targeted to health, safety and code compliance work and carry compliance periods of five to 10 years depending on the funding terms.
Officials told the committee that some funded work is still in progress: the 844 figure refers to completed units, while 1,172 refers to units that have been funded and are under active construction. Program staff described typical projects as smaller, scattered‑site rehabilitations that often require homeownership center support and significant project management.
Erin Caro Aguayo, a grants management specialist on the VHIP team, described leverage estimates that exceed 100% — meaning property owners typically contribute at least as much private money as public dollars — and said program partners counted roughly 436 unique property owners participating to date, including many small, independent developers. Staff reported about 43 new construction units in the pipeline; the program now allows new construction for buildings with fewer than five residential units so VHIP can fit into residential lending pathways.
Program leaders described administrative limits. Gilpin said the Department could administer roughly $15–20 million a year with current staffing and that some contract staff assignments end this year; he urged making the program part of the budget base to stabilize staffing. "I think the $4,000,000 that the governor has proposed in his budget is, from my professional experience, the minimum that we need to make sure that it's actually effective and creating new units," Gilpin said.
Officials also described a shift in payment mechanics: early years used reimbursement payments that created lump‑sum tax consequences for some property owners. To reduce that burden, the program now issues 0% forgivable loans that are forgiven proportionally over the compliance period; the forgiven share is treated as taxable income in the year forgiven.
What happens next: officials told the committee they will continue monitoring units as owners exit five‑year compliance terms, rework administrative deadlines as state funding replaces federal ARPA/CARES timelines, and pursue base funding to retain staff.
