Buying your first home can be thrilling and complicated, and where you buy is an important consideration. Vermont is home to approximately 624,000 residents — that’s less than some cities — as well as top industries, including technology, energy, manufacturing and agriculture. The state has both the most clean energy workers and public libraries per capita, and its schools consistently rank among the best in the country. Plus, more than three-quarters of the state is covered in forests, with more than 1,000 miles of hiking trails to venture out on.
If you’ve decided The Green Mountain State is where you want to buy your first home, the Vermont Housing Finance Agency can help. This state organization is dedicated to promoting affordable housing through mortgage and down payment assistance programs. Here’s a look.
Vermont first-time homebuyer loan programs
VHFA MOVE program
The Vermont Housing Finance Agency’s (VHFA) MOVE program offers the organization’s lowest interest rates, and could include lower mortgage insurance premiums if you’re borrowing a conventional loan. (You can also borrow an FHA, VA or USDA loan.)
These loans might come with a low down payment requirement, 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.
- 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
- 640 to 680 minimum credit score, depending on loan
- Maximum 45 percent to 50 percent debt-to-income (DTI) ratio, depending on loan
- Must complete pre-closing education course and counseling
- Must meet VHFA income limits, which vary according to county, household size and type of loan, and range from $59,680 to $110,000
- Can be a single-family home, condominium, townhome, duplex or certain manufactured homes (on owned land), depending on loan
- Must be in Vermont
- Must be a primary residence
- Must meet VHFA purchase price limits, which depend on county and range from $290,000 to $300,000 for a one-unit home
Vermont down payment assistance
VHFA ASSIST down payment assistance
The ASSIST program through VHFA offers first-time homebuyers down payment and closing cost assistance of up to $5,000. 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.
In order to qualify, you’ll be required to participate in homebuyer education, and must 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, excluding retirement savings.
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 VHFA to obtain your mortgage.
There are income limits for the MCC, which range from $79,500 to $110,000 depending on your household’s size and what county you live in. There is also a purchase price limit, which ranges from $290,000 up to $350,000.
VHFA MOVE MCC
This VHFA program combines the benefits of the MCC with the MOVE mortgage program, so 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 VHFA’s down payment ASSIST program.
Other first-time homebuyer loan programs
While you’re considering the first-time homebuyer programs available to Vermont residents, be sure to explore other national programs that could help you purchase a home. Check out Bankrate’s helpful guide to first-time homebuyer loans and programs to see what you might qualify for.
For other Vermont homeownership programs, including by city, visit HUD.gov.
Now that you have more information on first-time homebuyer programs in Vermont, you’re ready to take next steps. The Vermont Housing Finance Agency has a list of participating mortgage lenders who can help guide you as you start the loan process. Remember, no matter which lender or loan offer you choose, it’s important to first shop around for the lowest mortgage rates and compare loan products to be certain you’re getting the best mortgage for your situation.