On March 25, the Vermont Housing Improvement Program (VHIP), which seeks to expand affordable housing options across the state, announced a new loan program for the construction and repair of housing units.



In past years, the program has offered grants that require property owners to rent their newly renovated or constructed units at Fair Market Rent (FMR) – a standard according to the U.S. Department of Housing and Urban Development (HUD) – for five years. Their new program, VHIP 2.0, includes the addition of a 10-year forgivable loan. It is essentially a longer-term grant requiring units to be rented at FMR for at least 10 years. If a property owner fails to do so, funds would need to be repaid to the state.

About a year ago, Warren residents Jennifer and Francis Faillace were awarded a $50,000 VHIP grant for the construction of an ADU on their East Warren property. Awards range from $30,000 to $50,000 and in addition to be used for constructing an ADU on an owner-occupied property, can be applied toward rehabbing vacant units, building new units in existing structures, and building new residential structures with up to five units.

The Faillaces are required to provide a 20% match of $10,000 toward the project, which consists of building a one-bedroom ADU on the second floor of a larger structure roughly the size of the East Warren Community Market. They plan to rent the ADU to an employee of Francis Faillace’s company Vermont Pro Construction – allowing the company to hire and retain an employee who can live locally. In January, they also received a supplemental grant through the Agency of Natural Resources Healthy Homes Initiative to upgrade their septic system.


Jennifer Faillace, an attorney, and a member of the Warren Planning Commission, said the application was time-consuming and required a lot of paperwork, but that the effort was well worth the grant award. In applying, Valley property owners would work with Downstreet Housing and Community Development – an organization administering the grant in Washington County.

Between January 2022 and December 2023, VHIP awarded $11.5 million for the construction and renovation of 296 units across the state. The funding comes from the American Rescue Plan Act of 2021. Most of the grants awarded in Washington County went to property owners in Barre.

“For us personally, it’s going to be a huge opportunity to bring in one more employee to Vermont Pro Construction, which is huge,” Jennifer Faillace said. “Of course, it’s not going to make a big dent [in the housing crisis], but I think it’s a small window into the support system that Vermont does have. It just feels like something to be optimistic about.”

She said that one of the issues with the state’s housing crisis comes down to the difficulty of incentivizing large-scale developers to build affordable units. “Bringing in a project that’s profitable for a developer, that will also be rented as affordable housing units, is always an issue.”

“And if we don’t have the workforce to support a large-scale developer to build more housing, we’re never going to get that housing,” she said. 

The couple recently presented their plans to the Warren Development Review Board, who asked for additional materials before granting a building permit. They will appear before the board again for approval in early April. According to the terms of the VHIP grant, they will have 18 months to finish construction.