Vermont is proactively addressing its housing shortage through the Vermont Housing Improvement Program (VHIP) 2.0, offering grants and forgivable loans of up to $50,000 per unit to homeowners for the creation of Accessory Dwelling Units (ADUs). This initiative aims to expand affordable housing options by assisting property owners in developing ADUs on their premises.
Understanding VHIP 2.0
Launched to enhance the state's housing stock, VHIP 2.0 provides financial assistance to property owners for various projects, including:
- Developing New ADUs: Constructing new units on owner-occupied properties to increase rental housing availability.
- Rehabilitating Existing Units: Upgrading vacant or code-deficient units to meet Vermont Rental Housing Health Code standards.
- Structural Improvements: Addressing structural elements affecting multiple units, such as roofing in multi-family properties.
The program offers two financial options:
- 5-Year Grant: Requires a commitment to rent the unit at or below HUD Fair Market Rent (FMR) for five years.
- 10-Year Forgivable Loan: Requires renting the unit at or below FMR for ten years, with the loan forgiven incrementally over this period.
Eligibility Criteria
To qualify for VHIP 2.0, property owners must:
- Ownership Status: Own a single-family dwelling where either the primary residence or the ADU will be owner-occupied.
- Financial Standing: Be current on property taxes and mortgage payments.
- Matching Contribution: Provide at least a 20% match of the grant funds prior to the first disbursement.
- Compliance: Ensure the ADU meets Vermont Rental Housing Health Code guidelines and obtain all necessary state or local permits.
Application Process
Interested homeowners should apply through their regional Homeownership Centers, which oversee project management and compliance. These centers assist with:
- Initial Site Visits: Assessing the feasibility of the proposed ADU project.
- Scope and Budget Finalization: Helping define and finalize the project scope and budget.
- Permitting Assistance: Ensuring all necessary permits and regulatory compliances are met.
- Construction Oversight: Monitoring progress to ensure deadlines are met and conducting final inspections.
Applications are accepted on a rolling basis, allowing continuous support for eligible homeowners. To apply, contact your local Homeownership Center or visit the Vermont Agency of Commerce and Community Development's official website for more information.
Benefits of Developing an ADU through VHIP 2.0
- Financial Assistance: Significant funding to offset construction or rehabilitation costs, making ADU projects more attainable.
- Increased Housing Availability: Contributing to the state's affordable housing stock, providing more options for renters.
- Additional Income Stream: Homeowners can generate rental income, enhancing financial stability.
- Community Enrichment: Promoting diverse and affordable housing options strengthens community ties and supports local economies.
By participating in VHIP 2.0, Vermont homeowners have the opportunity to positively impact the housing landscape while benefiting from financial incentives and support.
