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Middlebury board forgives four deferred affordable‑housing loans totaling roughly $1.9 million
Summary
The Select Board approved forgiveness of four long‑term deferred loans that originated under state/community development programs; town staff said the loans function like grants after compliance periods ended and the state recommended closing them out.
The Middlebury Select Board voted April 20 to forgive four long‑term deferred loans linked to affordable‑housing projects, a move staff said follows state guidance to clear closedout compliance obligations.
Town staff told the board the loans were originally funded through federal block grants administered by the state and were structured as deferred loans tied to tax‑credit compliance periods. Once the compliance periods ended, the loans effectively functioned like grants and nonprofit owners requested forgiveness. A staff presenter said the state had recommended forgiveness and that forgiving the loans would not require new Middlebury taxpayer dollars because the funds had flowed federal → state → town at origination.
The board approved motions, by voice, to forgive the following active loans: - Middlebury South Housing LLP — $750,000, no interest, due March 21, 2037. - Auto Creek HLP — $192,500 at 4.4% interest, due April 9, 2038. - Smith Housing LP — $349,000, no interest, due Nov. 1, 2031. - Stone Hill Housing LP — $600,000, no interest, principal payments due July 30, 2035.
A board member moved each forgiveness action and the board voiced unanimous approval; town staff said the agreements will be recorded as closed and that the town’s role had been that of an intermediary/grantee rather than an ongoing lender. The staff presenter emphasized the town’s administrative role—uploading annual financials and certifying compliance—had been limited.
Town staff recommended the forgiveness primarily to satisfy state closeout requirements and to clear administrative obligations for the nonprofit owners. The board took no additional funding action at the meeting. The town clerk and staff will follow up to finalize paperwork for the affected agreements.
The motions were made and approved during the regular Select Board meeting; minutes and formal records of the votes will be included in the packet for the next public meeting.
