Vermont First-Time Home Buyer: 2025 Programs and Grants

What to know about buying a house in Vermont

Vermont home prices are rising at a rapid rate compared to many other states. This can be a real challenge for first-time home buyers.

Fortunately, Vermont can offer assistance in the form of mortgages with below-market rates, valuable tax breaks, and down payment assistance for eligible buyers. Here’s how to get started.

In this article (Skip to...)

• VT home buyer overview
• Home loan options
• VT home buyer programs
• First-time buyer grants
• Buying in Vermont’s cities
• Resources
• VT mortgage rates

Vermont home buyer overview

The median home sales price in Vermont was $405,600 in October 2024, according to Redfin. That increased 4.9% from a year earlier.

Even though home purchase prices in Vermont are lower than nationwide averages, becoming a homeowner can still be a huge hurdle for many first-time buyers. Luckily, the Green Mountain State offers home buying assistance in the form of counseling, special mortgage loans, and even cash to help with down payment and closing costs.

Vermont home buyer stats

Down payment amounts are based on the state's most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you're eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the US Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in Vermont

If you’re a first-time home buyer in Vermont with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved enough for 20% down. But the good news is that you don’t need that much. Not by a long shot. Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment loan programs:

• Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum FICO score. You can usually stop paying mortgage insurance after a few years once you reach 20% home equity
• FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
• VA loan: Only for veterans and active-duty service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
• USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
• Vermont Housing Finance Agency (VHFA): May include below-market mortgage rates, tax credits, and down payment assistance. More information below

Note that government loan programs (including the FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

Depending on the mortgage loan you choose, you could get into your new house with minimal cash out of pocket. These programs even let you use gifted money or down payment assistance (DPA) to cover the down payment and closing costs.

If you’re unsure which program to choose for your first mortgage, your lender or real estate agent can help you find the right match based on your finances and home buying goals.

Vermont first-time home buyer programs

The Vermont Housing Finance Agency (VHFA)⁴ has three home buying assistance programs for first-time buyers: MOVE, MOVE MCC, and ADVANTAGE.

All three of these programs offer genuinely valuable help. They also knock $825 off your Vermont property transfer tax. Program details and savings are subject to change; check the relevant website before you apply.

To top it off, buyers using a VHFA mortgage may also be in line for down payment assistance.

VHFA requirements

To be eligible for any of the VHFA programs, you’ll need

• A minimum credit score of 640
• Down payment between 0% to 5%, depending on lender
• You must also choose your lender from a list of companies approved⁵ by the VHFA. Indeed, the agency suggests that your first move should be to pick a lender from that list and ask for guidance
• No homeownership in the past three years when buying in Addison, Bennington, Chittenden, Grand Isle or Windsor counties

Furthermore, you’ll need an income that is below the stated household income limits and buy a home within purchase price limits. Check the income and purchase price limits webpage because these vary by area and family size.

VHFA MOVE program

The MOVE program offers a 30-year fixed-rate mortgage with a highly competitive interest rate across many loan types. You may also get lower-than-normal mortgage insurance if you opt for a Fannie Mae or Freddie Mac loan.

VHFA MOVE MCC

Similar to VHFA’s flagship MOVE program, the MOVE MCC also offers a 30-year fixed-rate mortgage loan. Although this home loan will likely come with a slightly higher interest rate. Even so, it is paired with a tax credit that can save up to $2,000 on your federal income taxes.

VHFA ADVANTAGE program

Borrowers who do not meet household income limits for either of the VHFA’s other home buyer assistance programs may qualify for the ADVANTAGE loan. While this program is nearly identical to the other two, its income limits are much higher to help middle-income buyers.

Vermont first-time home buyer grants

In addition to special mortgage programs, Vermont first-time home buyers may also qualify for extra cash to cover down payments and closing costs.

VHFA ASSIST Down Payment and Closing Cost Assistance

The VHFA doesn’t offer grants to first-time buyers. Instead, it can provide loans of up to $15,000 toward your down payment and closing costs.

However, those loans are highly attractive. They’re “silent” second mortgages, which means you pay 0% interest and make no monthly payments. You can forget the loan until your property is sold, refinanced, or the mortgage is paid in full.

Only at that point must you repay a single cent. Then you pay back only the sum you borrowed. Provided home prices continue to rise quickly in the state of Vermont, $15,000 could be just a small fraction of your home equity by the time you’re ready to move or refinance.

The eligibility criteria for this assistance program are similar to those for a VHFA mortgage (above).

VHFA Mortgage Credit Certificate

VHFA also offers a mortgage tax certificate program that can save up to $2,000 annually on your federal tax bill. It can be used with either the MOVE MCC or with a non-VHFA mortgage offered by a VHFA participating lender.

Tax credits are useful to first-time home buyers because they free up more available income to qualify for a home loan and assist you with monthly mortgage payments.

NeighborWorks of Western Vermont

If you need to borrow more than VHFA allows, NeighborWorks of Western Vermont says it can provide statewide loans of up to $40,000 or a 20% of the home purchase price, whichever is the lesser. But these hard loans must be repaid in monthly installments over 15 years. The interest rate will be 2% higher than your mortgage rate. Visit the website or call (802) 438-2303 to learn more.

Buying a home in Vermont’s major cities

Of Vermont’s three biggest cities, Rutland is by far the most affordable when it comes to home prices. However, home price inflation has been soaring there recently.

South Burlington is the most costly of the three, and its home prices have risen faster than the statewide average.

Burlington first-time home buyers

The median list price of homes in Burlington was $485,000 in October 2024. That fell 10.5% year-over-year, according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

• $14,550 for 3% down payment
• $97,000 for 20% down payment

The City of Burlington has a down payment assistance program that helps those wishing to buy a multi-unit dwelling. Assistance comes in the form of a no-interest, deferred loan of up to $10,000. Borrowers must live in one unit and rent out the other(s).

If you want a single-family home, the city’s website advises you to contact the Champlain Housing Trust, which provides a range of help to home buyers in Northwest Vermont. Call (802) 862-6244 or email info@getahome.org for more information.

South Burlington first-time home buyers

The median list price of homes in South Burlington was $577,000 in October 2024. That dropped 10.5% annually, according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

• $17,310 for 3% down payment
• $115,400 for 20% down payment

We could find no trace of a down payment assistance program on the City of South Burlington’s website. But you could call (802) 846-4107 to see if we missed something.

Given that, like Burlington, South Burlington is in Chittenden County, you may be able to get help from the Champlain Housing Trust. See the last section for details.

Rutland first-time home buyers

The median list price of homes in Rutland was $299,500 in October 2024. That rose 4.7% year-over-year, according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

• $8,985 for 3% down payment
• $59,900 for 20% down payment

Again, we could find no trace of a down payment assistance program on the City of Rutland’s website. So you may have to fall back on the VHFA or NeighborWorks for help.

Where to find home buying help in Vermont

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in Vermont.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides lists of statewide, regional, and local resources for home buyers in Vermont:

Statewide and regional Vermont first-time home buyer programs

• Vermont Housing Finance Agency: Homebuyer assistance programs, including down payment and closing cost assistance
• Habitat for Humanity: Through volunteer labor, builds and rehabilitates houses for families in need
• U.S. Department of Agriculture Rural Housing: Homeownership programs in rural communities

Vermont first-time home buyer programs by city/town

• Burlington
• Windham and Windsor

What are today’s mortgage rates in Vermont?

You can see today’s live mortgage rates in Vermont here.

When you’re ready to start the home buying process, experiment with a mortgage calculator to see how down payment and interest rates will affect your mortgage payment. Then, get personalized rate quotes from at least three to five mortgage lenders.

Don’t just look at advertised rates online. Apply for preapproval and compare the interest rates and fees you’re offered. Because that’s the only way to know you’re getting the best deal possible on your new home loan.

¹Source: Redfin Vermont Housing Market

²Source: Experian.com 2022 study of 2021 data

³Based on a review of the state's available DPA grants at the time this was written

⁴The Vermont Housing Finance Agency (VHFA)

⁵VHFA List of Approved Companies