Blames unexpected loss of $1 million in HUD funding

By Guy Page

The Vermont State Housing Authority (VSHA) will stop issuing new low-income housing vouchers following an unexpected reduction in federal funding from the U.S. Department of Housing and Urban Development (HUD). 

According to a May 21 letter addressed to ‘community partners,’ VSHA received notice of an approximate $1 million cut to its calendar year 2025 allocation for the Housing Choice Voucher (HCV) and Mainstream Voucher programs.

The reduction came as a surprise, as VSHA had anticipated level funding after a Continuing Resolution was approved in March 2025. About 4,000 families rely on VSHA rental assistance.

“We understand that these measures will have significant impacts on the work that you do,” Elizabeth Bacon, Managing Director of the Housing Programs Administration, said. “Though necessary, we hope that these actions are temporary as we navigate this challenging budgetary environment.”

Effective immediately, VSHA is:

• Ceasing the issuance of vouchers to new applicants currently on the HCV and Mainstream waiting lists.
• Temporarily pausing referrals for Special Purpose Vouchers, including programs like HUD-VASH (for veterans), the Family Unification Program (FUP), and Foster Youth to Independence (FYI).
• Suspending “Continued Assistance” moves for tenants transitioning from Project-Based Vouchers to Tenant-Based assistance. Those requesting this type of assistance will now be placed on the waiting list and will receive the next available subsidy based on their request date. Existing contractual obligations for Project-Based Voucher agreements, such as filling vacant units, will continue to be honored.
• Restricting portability for voucher holders wishing to move to other jurisdictions. Portability will now only be permitted to areas where the Voucher Payment Standards are less than or equal to VSHA’s highest standard. Additionally, VSHA will begin billing other jurisdictions for “Ports In”.
• Suspending new enrollments into the Family Self-Sufficiency (FSS) Program.
• Pulling back vouchers that have been issued but have not yet been leased by applicant households. These affected households will be placed back on the waiting list and will be contacted once funding becomes available.

The loss of federal housing funding would appear to add to the uncertainty and financial shortfall in Vermont’s government response to homelessness. Vermont has the second highest rate of homelessness (after California), according to a November, 2024 study issued by Vermont Law School. Gov. Scott this week announced he would veto H.91, which creates a permanent bureaucracy and funding for sheltering Vermont’s homeless population.