Housing Vermont secures $20 million in private capital for affordable housing
Regional and state financial institutions are providing a critical $20 million boost to the state’s nonprofit affordable housing developers. Housing Vermont announced that a consortium of eight financial institutions is making $20 million in private equity available to developers of affordable apartments through the federal Low Income Housing Tax Credit program.
“Once again Vermont brings a high level of leadership and commitment to providing quality rental housing to all of our residents,” said Housing Vermont President Nancy Owens. “The $20 million in capital committed by the investors in our Green Mountain Housing Equity Fund will help finance at least eight rental housing developments with roughly 200 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.
“Federal capital funds and rental subsidies are very scarce, so tax credit equity has become even more valuable in making housing affordable to Vermonters,” Owens said.
The eight financial institutions which are investing in Housing Vermont’s equity fund are Key CDC, National Life Insurance Company, TD Bank, People’s United Bank, NBT Bank, Merchants Bank, Arrow Financial, and the Bank of Bennington.
“Vermont has the second lowest rental vacancy rate in the country,” Owens said. “These financial institutions will help us create housing and advance community development goals while earning a fair financial return on their investment.”
Housing Vermont is a private, nonprofit development company founded in 1988 to produce permanently affordable rental housing for Vermonters through partnerships with communities and the private sector.
Housing Vermont has raised more than $247 million in private equity to finance 145 affordable rental housing developments throughout the state. The more than 4,400 apartments created or renovated in these efforts serve low and moderate income Vermonters including seniors and those with special needs. Many developments also include commercial space.
Housing Vermont 3.20.2012