First-time home buyer programs in Vermont: assistance, loans and real costs

Vermont puts its transfer tax on the buyer but gives VHFA-financed first-time buyers a partial exemption on it, one of the few states whose housing agency loan directly reduces a government closing cost. Everything else on this page — the agency programs, the tax credit, the closing costs — sits on top of that fact.

State housing agency	Vermont Housing Finance Agency (VHFA)
Median home price (approx.)	$400,000 — statewide order of magnitude; metros differ
3.5% / 5% / 20% down	$14,000 / $20,000 / $80,000 on the median
Property tax (effective)	about 1.83% — roughly $7,320 a year on the median
Mortgage credit certificate	Yes — mortgage credit certificate offered
Transfer tax	Vermont’s property transfer tax is 1.25% of the price (0.5% on the first $100,000 of a principal residence, and a 1.45% combined rate including the clean water surcharge on the portion above), customarily paid by the buyer; VHFA and USDA financed purchases get a further exemption on the first portion.

State programs for first-time buyers in Vermont

The Vermont Housing Finance Agency’s MOVE and Advantage programs offer first mortgages to first-time buyers (and repeat buyers in targeted areas), with the ASSIST down payment and closing cost loan; VHFA also offers a Mortgage Credit Certificate (MOVE MCC) and serves manufactured-home buyers.

The down payment help, and how it must be repaid

ASSIST provides a 0% second loan (commonly $10,000 to $15,000 depending on program and need) with no monthly payment, due on sale, refinance or payoff, to cover down payment and closing costs.

Assistance structures matter as much as amounts: a grant is free; a forgivable second disappears if you stay long enough; a deferred second is repaid when you sell or refinance; a repayable second adds a monthly payment. Ask which one you are being offered. See how down payment assistance programs work.

The MCC: a federal tax credit for the life of the loan

VHFA’s MOVE MCC pairs a first mortgage with a Mortgage Credit Certificate worth a federal tax credit on a portion of annual interest, subject to income and price limits.

Income and purchase price limits

VHFA income limits vary by county and household size and purchase price limits apply (higher in targeted areas); a 620 minimum credit score and homebuyer education are required for ASSIST.

Transfer taxes and closing costs in Vermont

Vermont’s property transfer tax is 1.25% of the price (0.5% on the first $100,000 of a principal residence, and a 1.45% combined rate including the clean water surcharge on the portion above), customarily paid by the buyer; VHFA and USDA financed purchases get a further exemption on the first portion.

Because the transfer tax falls on the buyer, Vermont closing costs are among the highest in New England — commonly 3% to 4% of the price including attorney, title and lender fees — though VHFA buyers get a partial transfer tax exemption. The closing costs guide shows what is negotiable; seller concessions shows how much a seller may contribute on each loan type.

Worked example: buying the median home in Vermont

The numbers below assume Vermont’s approximate median price of $400,000 and a 6.5% rate chosen for illustration, not quoted. Property tax is estimated from the state’s effective rate of about 1.83% — $7,320 a year at this price — and will differ by county. Add homeowners insurance and, below 20% down, mortgage insurance.

Structure	Down payment	Loan amount	P&I at 6.5% (30 yr)	Property tax / mo (est.)
FHA, 3.5% down	$14,000	$386,000	$2,440	$610
Conventional, 5% down	$20,000	$380,000	$2,402	$610
Conventional, 20% down (no PMI)	$80,000	$320,000	$2,023	$610

Illustrative rate and approximate state figures — not an offer or a quote. Full payment tables cover $150,000 to $800,000 at 5% to 8%; the affordability guide explains how lenders size the loan.

Frequently asked questions

Does Vermont have down payment assistance for first-time buyers?

ASSIST provides a 0% second loan (commonly $10,000 to $15,000 depending on program and need) with no monthly payment, due on sale, refinance or payoff, to cover down payment and closing costs. Amounts and structures are updated regularly; treat the figures here as the shape of the program and verify the current numbers with the agency.

Is there a first-time home buyer tax credit in Vermont?

VHFA’s MOVE MCC pairs a first mortgage with a Mortgage Credit Certificate worth a federal tax credit on a portion of annual interest, subject to income and price limits. The credit is worth a percentage of the mortgage interest you pay each year, up to a federal cap, and can be combined with many first-mortgage programs.

What are typical closing costs when buying a house in Vermont?

Because the transfer tax falls on the buyer, Vermont closing costs are among the highest in New England — commonly 3% to 4% of the price including attorney, title and lender fees — though VHFA buyers get a partial transfer tax exemption. Vermont’s property transfer tax is 1.25% of the price (0.5% on the first $100,000 of a principal residence, and a 1.45% combined rate including the clean water surcharge on the portion above), customarily paid by the buyer; VHFA and USDA financed purchases get a further exemption on the first portion.