Developed by Cathedral Square Corp., Bayview Crossing provides 30 affordable homes for older adults in South Hero, Vermont. The development received a $400,000 loan from the Vermont Housing Investment Fund. Bayview Crossing is the first affordable housing community to be built in Grand Isle County in 17 years.
Sally McCay Developed by Cathedral Square Corp., Bayview Crossing provides 30 affordable homes for older adults in South Hero, Vermont. The development received a $400,000 loan from the Vermont Housing Investment Fund. Bayview Crossing is the first affordable housing community to be built in Grand Isle County in 17 years.

The Vermont Housing Investment Fund (VHIF) is an important response to the challenges of financing affordable housing.

Established by the Vermont Housing Finance Agency (VHFA), the fund provides critical capital to fill project budget gaps that are not being met through traditional affordable housing resources.

The fund combines private investments from philanthropic institutions and public and private funders, including banks and credit unions, into a single revolving platform that provides grants and low-interest loans to developers, typically alongside low-income housing tax credits (LIHTCs) or other agency financing.

VHIF helps fill three distinct needs, says Seth Leonard, VHFA’s managing director of community development.

“First, we are experiencing unprecedented cost pressures when it comes to developing affordable housing,” he says. “Our development costs since 2018 have gone up 78% on tax credit projects. In that same time period, the resources that we use to fund affordable housing have not increased by that much. We’ve had to be creative in thinking about how to fill those gaps. We needed additional resources.”

VHIF is also important because it offers an opportunity for nontraditional investors in affordable housing to participate. The fund provides a vehicle for these funders who may have been hesitant to get involved on an individual project basis.

The third piece is that the fund, initially fueled by local investments, has gone on to leverage other resources, including two federal Capital Magnet Fund awards totaling $8.5 million.

As of December, the fund had secured nearly $16 million in grants and loans from the Federal Home Loan Bank of Boston, New England Federal Credit Union, the Treasury Department’s Capital Magnet Fund, the Vermont Community Foundation, and VHFA’s own reserves.

The fund is invested as revolving loans to housing developers, including predevelopment loans, short-term loans to bridge financing or to allow for preservation-focused acquisitions, and low-interest long-term loans. To date, the fund has supported the development or preservation of 834 apartments in 17 developments statewide. Eighty of these homes will support Vermonters exiting homelessness.

The program recently earned VHFA a National Council of State Housing Agencies (NCSHA) Award for Program Excellence in the Rental Housing: Encouraging New Construction category.

“This year’s award winners are proof that housing finance agency (HFA) innovation and impact are rising to meet the moment of higher interest rates, record housing affordability needs, and the chronic undersupply of affordable, accessible housing everywhere in America,” said NCSHA executive director Stockton Williams.

Bringing Medicaid Dollars to Housing

Oregon Housing and Community Services (OHCS) was recognized for its groundbreaking Section 1115 of the Social Security Act Medicaid waiver efforts that are setting the tone for new housing and health innovations.

The agency earned NCSHA’s program excellence award in the Special Needs Housing: Combating Homelessness category.

"Oregon is continuing to lead innovative solutions for affordable housing,” says OHCS director Andrea Bell. “Significant transformation is already underway with Oregon leading not only in production of affordable housing but also pioneering historic measures that integrate health and housing at individual, community, and state levels. Oregon is getting ready to implement groundbreaking efforts to make housing more stable within a Medicaid context."

Federal Medicaid dollars have largely remained untapped for housing needs.

Oregon officials worked to receive a key waiver to provide Medicaid funding for housing and food supports to vulnerable populations. This means that qualified Oregon Health Plan members who are facing certain life challenges will have social supports available to them to stay healthy at times in their lives when they are experiencing a greater need, according to officials.

Over the next five years, Oregon will utilize more than $1 billion of federal resources to serve populations vulnerable to experiencing homelessness.

The work to get the state waiver approved was led by the Oregon Health Authority and OHCS.

Targeted interventions can reduce the cost of emergency room visits saving money and decreasing the severity of illness in the process,” said officials. “When more Oregonians have their housing needs met, people and families are healthier, our communities thrive and health care costs are contained for everyone.”

Delaware Land Bank Program

A new Delaware State Housing Authority (DSHA) program offers affordable housing developers the precious “gift of time.”

The agency recently set aside $5 million for the Area of Opportunity Land Bank Program. The revolving loan fund aims to support developers in building affordable housing across the state.

Launched during the COVID-19 pandemic, the program seeks to give developers more time to work through the LIHTC process when building in areas that have limited affordable housing but may have economic opportunities, high-performing schools, and other assets.

The strong demand for the housing tax credit as well as the overall competitiveness of the real estate market often make it tough for affordable housing developers to retain site control of a property through more than one LIHTC funding round.

The program assists developers to maintain site control when they otherwise might not be able to because of the costs and competition from other buyers.

While the land bank program is still new, DSHA officials report seeing strong interest. One developer, who initially missed receiving a LIHTC reservation, used the program to secure site control of a parcel while continuing to work through the predevelopment process.

DSHA earned an NCSHA Award for Program Excellence in the Rental Housing: Encouraging New Construction category.

See all the NCSHA award winners here.