Homes sales should see nice boost from VHFA loan program
By Bruce Edwards
STAFF WRITER | August 16,2014
An infusion of $20 million in the Vermont Housing Finance Agency’s low-interest loan program is expected to help boost home sales in Rutland County.
“Vermont is definitely poised to have a lot of new homebuyer activity, and this comes at a very good time for anyone sitting on the fence wondering if now is a good time to buy because it is,” said Ludy Biddle, executive director of NeighborWorks of Western Vermont, a local affordable housing group.
The Rutland area in particular has a “plentiful supply of affordable housing stock,” she said.
The Vermont Housing Finance Agency announced Friday it was releasing $20 million in financing with a “historically low, fixed interest rate of 3.875 percent for 30-year mortgages.”
The rate is available for VHFA conventional loans and government loan programs.
“This rate helps us extend the dream of homeownership to more people,” VHFA Executive Director Sarah Carpenter said in a statement. “Although we are always finding new ways to offer the lowest rates we can, we may not be able to offer this rate for long due to the limited size of the funding pool.”
Before Friday’s announcement, Biddle said there had been an uptick in interest in an upcoming NeighborWorks (www.nwwvt.org) homebuyer workshop.
About 75 people are signed up for next month’s workshop, Biddle said.
“Just compare that to the last couple of years, 100 have gone through homebuyer education in the year,” she said.
She said participants come away with information so they can avoid surprises along the way.
“Surprises are fun in a scary movie, but they’re not fun in the homebuyer realm,” Biddle said.
She said the interest among would-be homebuyers is driven by the low interest rate environment and an affordable selection of properties.
“If you compare the home affordability in Rutland County, or Addison, Bennington, to something like Chittenden County, you should be glad you’re living here,” Biddle said.
Also she said, “People have a little more confidence in the future, and there is a pent up desire for investment.”
One problem continues to stalk Rutland County: the highest number of foreclosures in the state. According to the Department of Financial Regulation, Rutland County tallied 95 foreclosures this year through July; Windsor County recorded 93; Chittenden County, the state’s largest county had 76 filings. Last year, Rutland County led the state with 225 foreclosures.
According to the VHFA, its borrowers saved up to $625 at closing because the first $110,000 of the purchase price is exempt from the Vermont Property Transfer Tax.
In addition, VHFA loans carry no loan level pricing adjustments or loan delivery fees from Fannie Mae or Freddie Mac. The mortgages also have lower mortgage insurance coverage requirements, lower premiums, and expanded eligibility.
More information on VHFA’s loan programs and local participating lenders are available on at www.vhfa.org.
Since its inception in 1974, VHFA has helped approximately 28,000 Vermont households with affordable mortgages and financed the development of approximately 8,600 affordable rental units.