Housing Vermont Secures $18 Million For Affordable Housing
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Vermont’s banking and insurance companies are providing a critical $18 million boost to the state’s affordable housing developers. Housing Vermont announced that a consortium of six financial institutions is making $18 million in private equity available to developers of affordable apartments.
“Once again Vermont is evidencing a high level of leadership and commitment to providing quality rental housing to all of our residents,” said Housing Vermont President Nancy Owens. “The $18 million in capital committed by the investors in our Green Mountain Housing Equity Fund will help finance about 11 rental housing developments with 360 apartments throughout the state.”
Under the Low Income Housing Tax Credit Program, investors purchase a 10-year stream of federal tax credits. The equity from the sale of credits is used to finance affordable rental housing. Since the equity is not repaid to the investors, it sharply reduces debt service costs and rents.
“Rental subsidies are very scarce, so we depend upon low-cost or no-cost sources of funds to make our housing affordable to Vermonters,” Owens said.
The six financial institutions which are investing in Housing Vermont’s equity fund are TD Bank; National Life; NBT Bank; Chittenden Bank, a division of People’s United Bank; Citizens Bank and Merchants Bank.
“In other areas of the country, banks and insurance companies are curtailing their investments in vehicles like the Green Mountain Housing Equity Fund,” Owens said. “Vermont institutions appreciate our ability to combine a fair financial return on their investment with opportunities to create housing and advance community development goals.”
The pipeline of community housing projects under development is strong. Projects in Burlington, Winooski and Montpelier have already received commitments for capital through the Green Mountain Housing Equity Fund. Other commitments will be made through 2010.