What to know about buying a house in Vermont

Looking to buy a house in Vermont? You may face some challenges due to the rising home prices, especially if you're a first-time buyer. However, Vermont offers several programs to help eligible buyers. For instance, some lenders offer mortgages with below-market rates, special tax breaks, and down payment assistance. The median home sales price in Vermont was $331,520 in December 2022, according to the Vermont Association of REALTORS, which is up 8.2% from a year earlier. Although home purchase prices in Vermont are lower than the national average, becoming a homeowner can be difficult for many first-time buyers. The article provides information on home loan options, first-time buyer grants, Vermont's cities, and resources. If you're a first-time homebuyer in Vermont with a 20% down payment, you can get a conventional loan with a low-interest rate. However, few first-time buyers have saved enough for a 20% down payment. Fortunately, Vermont offers other loan programs with lower down payments, such as Conventional 97, FHA loans, VA loans, USDA loans, and VHFA. VHFA has three home buying assistance programs for first-time buyers: MOVE, MOVE MCC, and ADVANTAGE. All three programs offer valuable help and knock off $825 from the Vermont property transfer tax. To be eligible for any of the VHFA programs, you need a minimum credit score of 640, down payment between 0% to 5% depending on the lender, and an income below the household income limits. You also need to buy a home within purchase price limits, which vary by area and family size.

 

 

Loan Type Minimum Down Payment Credit Score Requirement Property Type Mortgage Insurance Eligibility
Conventional 97 3% 620 Primary Residence Yes, until 20% home equity First-time home buyers
FHA Loan 3.5% 580 Primary Residence Yes, until refinanced or paid off First-time home buyers
VA Loan 0% Varies by lender, often 620 Primary Residence No ongoing mortgage insurance Veterans and active-duty service members
USDA Loan 0% Varies by lender, often 640 Primary Residence in designated rural areas Low mortgage insurance rates Low-to-moderate income buyers
VHFA 0% to 5% 640 Primary Residence Varies by program First-time home buyers, income and purchase price limits apply

Note: The above information is subject to change. It is recommended to check with individual lenders and programs for up-to-date information.

 

 

Buying a home in Vermont’s major cities

Vermont has several major cities, each with its unique character, charm, and real estate market. Here are some details about buying a home in some of Vermont's major cities:

 

Burlington

Burlington is the largest city in Vermont and offers a mix of urban and suburban living. The city has a vibrant downtown with restaurants, bars, and shops. Homebuyers can find a range of properties in Burlington, from historic homes to modern apartments.

 

Rutland

Rutland is a smaller city located in southwestern Vermont. The city has a historic downtown area with a variety of shops and restaurants. Homebuyers in Rutland can find properties ranging from large Victorian homes to smaller, more affordable homes.

 

Montpelier

Montpelier is the capital of Vermont and is the smallest state capital in the country. The city has a charming downtown area with local shops and restaurants. Homebuyers in Montpelier can find a variety of properties, including historic homes and modern apartments.

 

South Burlington

South Burlington is a suburb of Burlington and is known for its excellent schools and family-friendly neighborhoods. Homebuyers in South Burlington can find a range of properties, including single-family homes, townhouses, and apartments.

 

Barre

Barre is a small city located in central Vermont. The city is known for its historic granite quarries and is home to many granite sculptures and memorials. Homebuyers in Barre can find a range of properties, including historic homes and newer construction.

 

Brattleboro

Brattleboro is a small city located in southeastern Vermont, near the border with New Hampshire. The city has a vibrant downtown area with shops, restaurants, and galleries. Homebuyers in Brattleboro can find a variety of properties, including historic homes, modern apartments, and condos.

 

Bennington

Bennington is a small city located in southwestern Vermont, near the border with New York. The city is known for its historic downtown area and is home to several museums and galleries. Homebuyers in Bennington can find a range of properties, including historic homes and modern apartments.

 

St. Albans

St. Albans is a small city located in northwestern Vermont. The city is known for its historic downtown area and is home to several parks and recreational areas. Homebuyers in St. Albans can find a variety of properties, including historic homes, newer construction, and condos.

 

Vermont first-time home buyer grants

Vermont offers several first-time home buyer grants and programs to help make home ownership more accessible for low- and moderate-income residents. Here are some details on a few of these programs:

 
Vermont Housing Finance Agency (VHFA)

VHFA offers down payment and closing cost assistance through its ASSIST program. Eligible borrowers can receive up to $5,000 in assistance, which is a grant and does not need to be repaid. To qualify, borrowers must meet income and credit score requirements, and the home being purchased must meet certain price limits.

 

Vermont Community Development Program (VCDP)

The VCDP provides grants to eligible organizations, which can then provide down payment and closing cost assistance to first-time home buyers. The program is available in select cities and towns throughout Vermont.

 

NeighborWorks of Western Vermont

NeighborWorks is a non-profit organization that provides homebuyer education and financial assistance programs, including down payment assistance and closing cost grants. The organization also offers home repair and energy efficiency programs.

 

USDA Rural Development

The USDA offers a loan program specifically for low- and moderate-income first-time home buyers in rural areas of Vermont. Eligible borrowers can receive up to 100% financing and no down payment is required.

 

These are just a few examples of the first-time home buyer grants and programs available in Vermont. It's important to note that eligibility requirements and program details can vary, so it's best to research and compare different options to find the right program for your needs.

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