Home prices in Vermont are up about 5 percent from last year as of Nov. 2023, and the number of homes for sale there has dropped nearly 9 percent, according to data from Redfin. However, that doesn’t mean you can’t become a first-time homebuyer in Vermont.

If you want to call The Green Mountain State your home, the Vermont Housing Finance Agency can help you get the funds you need to make it happen. This state organization is dedicated to promoting affordable housing through mortgage and down payment assistance programs. Here’s a look at some of the options that might be able to help you in your homebuying journey.

Vermont first-time homebuyer programs

VHFA MOVE program

The Vermont Housing Finance Agency’s (VHFA) MOVE program offers the organization’s lowest interest rates. These loans might come with a low down payment requirement between 0 and 5 percent of the purchase price, and all can be combined with the agency’s down payment assistance program for even more upfront savings. In addition, you could save up to $825 on the Vermont transfer tax.

Borrower requirements:

  • Must be a first-time homebuyer (or have not owned a residence in the prior three years) if purchasing in Addison, Bennington, Chittenden, Grand Isle or Windsor counties
  • Minimum 640 credit score (may need a higher score depending on the lender)
  • Must complete pre-closing education course
  • Must meet VHFA income limits, which vary by county, household size and type of loan, and range from $100,000 to $140,000.

Property requirements:

  • Can be a single-family home, condominium, duplex or certain manufactured homes (on owned land), depending on the loan
  • Must be in Vermont
  • Must be a primary residence
  • Must meet VHFA purchase price limits, which depend on the county and property type and range from$400,000 to $450,000

VHFA Advantage program

If you don’t qualify for MOVE, the VHFA’s Advantage program may be an option. The program offers higher income and purchase price limits — a $130,000 annual earning cap ($160,000 if your household has 3 or more individuals) and a $475,000 maximum sales price, regardless of the county. The requirements are fairly similar to those for the MOVE program, including a minimum 640 credit score.

Vermont down payment assistance

VHFA ASSIST down payment assistance

The ASSIST program through the VHFA offers first-time homebuyers down payment and closing cost assistance of up to $15,000. This assistance, which is a no-interest, no-monthly payment loan, is available to those who qualify for VHFA’s MOVE and Advantage mortgage programs. The loan must be repaid when you sell your home or refinance your first mortgage.

To qualify, you’ll need to complete homebuyer education, and meet the income and purchase price limits that apply to the first mortgage program you’re using. You also can’t have more than $30,000 in liquid assets.

First-Generation Homebuyer Assistance

The VHFA also offers grants of up to $15,000 toward down payment and closing costs for first-generation homebuyers, which the organization defines by meeting one of these conditions:

  • You have been placed in foster care at some time in your life.
  • Your parents or legal guardians have never owned a home.
  • Your parents or legal guardians lost their home due to foreclosure.

You may combine this money with funds received from the ASSIST program, too. The grant money is available on a first-come, first-served basis until it runs out.

Other Vermont homebuyer assistance programs

Mortgage credit certificate (MCC)

In Vermont, first-time homebuyers, qualifying veterans and those purchasing in specific target areas are eligible for a mortgage credit certificate (MCC), a tax credit on their mortgage interest equal to up to $2,000 per year. This program is available to all qualifying borrowers, regardless of whether you work with the VHFA to obtain your mortgage.

There are income limits for the MCC, which range from $100,000 to $140,000 depending on your household’s size and what county you live in. There is also a purchase price limit, which ranges from $400,000 to $450,000.

VHFA MOVE MCC

This VHFA program combines the benefits of the MCC with the MOVE mortgage program. With this option, you can get the federal tax credit as well as the advantages of a MOVE loan, including savings on transfer taxes, low down payment options and lower mortgage insurance. This program can also be used in conjunction with the VHFA’s down payment ASSIST program.

Burlington: Community & Economic Development Office and Champlain Housing Trust

Low- and moderate-income borrowers who are trying to buy a duplex in the biggest city in Vermont may be eligible for a $10,000 no-interest deferred loan for a down payment. You’ll need to be ready to be a landlord, though: The program is specifically for two-, three- and four-bedroom units located in the Old North End, Lakeside or King Street neighborhoods. The program is available to all buyers, but first-time buyers get priority consideration.

Other first-time homebuyer loan programs

While you’re considering the first-time homebuyer programs available specifically for Vermont residents, be sure to explore other national programs that could help you purchase a home. Government-backed programs such as FHA loans, VA loans and USDA loans can be good options for qualifying borrowers with low incomes or less-than-perfect credit scores.

Get started

Now that you have more information on first-time homebuyer programs in Vermont, you’re ready to take the next step: Browse the VHFA’s list of participating mortgage lenders to learn more about which options might be available based on your financial situation. Once you’re ready to apply, be sure to sign up for a homebuyer education course to make sure you’ve checked that to-do off your list.

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