Housing Infrastructure Loan Program Closes First Loan
Housing Infrastructure Loan Program Closes First Loan
Innovative Bond Bank loan will provide $2.4 million for City of Barre infrastructure supporting 31 new housing units
Tuesday, May 26, 2026 (Burlington, VT) — The Vermont Bond Bank (Bond Bank) today announced the close of its first loan under the Housing Infrastructure Loan Program (HILP), which will provide the City of Barre $2.4 million for infrastructure improvements. The work will enable 31 units of housing to be developed by Downstreet Housing as part of the Stevens Branch project.
The low-cost loan program is among the first in the country focused on lowering infrastructure financing costs to support housing development. The loan to Barre will save the city nearly $400,000 over its life—a 12% overall savings.
Sponsorship of the supporting legislation was driven by Representative Marc Mihaly of Calais—passed in law as Act 69 (H. 479). Said Mihaly, “The cost savings produced by this program are exactly what we intended through this legislation. Less costly infrastructure will mean capacity for more and less expensive housing.”
"In conjunction with our Tax Increment Finance District, the HILP loan program is helping Barre City recover much-needed housing lost during the 2023 and 2024 floods. The interest savings will lower costs for the city and give us additional capacity for other similar projects that we're working on for the near future," said Barre City Treasurer Carol Dawes.
The creation of HILP was a collaborative effort among the Department of Environmental Conservation, the Department of Housing and Community Development (DHCD), and the Bond Bank. All three entities worked to identify gaps in the existing infrastructure finance landscape and design a quick, flexible, and low-cost program.
“The water and wastewater infrastructure beneath our communities—often unseen and overlooked—is essential to everyday life and fundamental to achieving Vermont’s housing goals. Reliable drinking water, effective wastewater systems, and adequate fire protection are the backbone of healthy, resilient communities and the foundation for new housing development,” stated Division of Drinking and Ground Water Protection Director Bryan Redmond in response to the announcement.
“We know that the cost of infrastructure is one of the greatest barriers to building housing at an affordable cost in Vermont,” said DHCD Commissioner Alex Farrell. “This program takes a tactical approach to reducing that barrier, enabling more projects to move forward, particularly in communities most in need of these investments.”
The Bond Bank received $7.5 million under Act 69 of 2025 to create the program. Executive Director Michael Gaughan noted, “We are constantly working to address Vermont’s biggest policy challenges through state partnership and no issue is more important than housing.”
The Bond Bank plans to leverage the state’s investment to expand the program’s capacity and will use loan repayments to make future loans. Please visit www.vtbondbank.org/hilp for more information.
About the Vermont Bond Bank
Created in 1969 as the nation’s first state bond bank, the Bond Bank helps finance and implement crucial municipal infrastructure at lower costs to communities by providing access to more affordable capital.
The Bond Bank does this by overcoming gaps in information, scale, and credit to allow cities, towns, villages, school districts, and other forms of government to achieve equitable access to capital. This market specialization also helps with expertise in recognizing emerging needs like flood relief and managing federal requirements for faster and easier access to capital.
In addition to facilities and infrastructure lending, the Bond Bank also provides post disaster bridge loans and is the financial administrator of the State of Vermont Clean and Drinking Water State Revolving Loan Funds.
Contact: michael@vtbondbank.org
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