The Virginia Housing Trust Fund Loan and Grant Fund Impacts and the FY 2026 Structure and Use Plan
Summary
Report on the Virginia Housing Trust Fund Loan and Grant Fund Impacts and the FY 2026 Structure and Use Plan, submitted by the Department of Housing and Community Development in November 2025 to the Governor, the Secretary of Commerce and Trade, the House Appropriations Committee, and the Senate Finance and Appropriations Committee. The report states that the 2012 Appropriations Act established the Trust Fund and provided an initial allocation of $8 million to become available in FY 2014. It states that for Homeless Reduction Grants in FY2024, over $18.5 million was requested for $12 million made available, with 72 applications and 55 awards, and that a total of 2,661 households experiencing homelessness were served during CY 2024 with Homeless Reduction Grant funding.
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“The Virginia Housing Trust Fund Loan and Grant Fund Impacts and the FY 2026 Structure and Use Plan.”
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Report to the Governor, the Secretary of
Commerce and Trade, the House
Appropriations Committee, and the Senate
Finance and Appropriations Committee
The Virginia Housing Trust Fund Loan and Grant Fund Impacts
and the
FY 2026 Structure and Use Plan
____________________________________________________
Submitted by:
The Department of Housing and Community Development
November 2025
1
The Virginia Housing Trust Fund and the Financial Status of the Virginia Housing Partnership
Revolving Fund
Introduction
During its 2013 regular session, the General Assembly amended provisions of Chapter 9 of Title
36 of the Code of Virginia to provide statutory direction for the administration of the Virginia
Housing Trust Fund (VHTF). Item 108 G of the 2012 Appropriations Act established the Trust
Fund and provided an initial allocation of $8 million to become available in FY 2014. The 2013
statutory changes modified certain reporting requirements that originally applied to the former
Virginia Housing Partnership Revolving Fund. Effective July 1, 2013, § 36-150 of the Code of
Virginia required the Department of Housing and Community Development (DHCD) to report
annually on the Trust Fund and such other matters the Department may deem appropriate,
including the status of the former Housing Partnership Revolving Fund. Designated recipients of
the report include the Governor, Secretary of Commerce and Trade and the Chairs of the House
Appropriations and the Senate Finance and Appropriations Committees.
In accordance with the requirement of § 36-150 of the Code of Virginia, 1 DHCD presents the
following document, which includes two sections. Part I reviews the current allocation of funds
for VHTF activities and the impacts of funds allocated in 2023-2024, as well as changes to the
VHTF program design from the previous program year. Part II updates information concerning
the financial status of the Virginia Housing Partnership Revolving Fund, presently administered
by Virginia Housing. The latter section continues the format used during previous years in
accordance with the former statute and incorporates materials provided by Virginia Housing’s
independent auditor, KPMG LLP.
1 https://law.lis.virginia.gov/vacode/title36/chapter9/section36-150/
2
Part I: The Virginia Housing Trust Fund
Purpose and Background
The Biennium Budget for 2024-2026 (Special Session I, 2024) allocated $87,500,000 in the first
year and $87,500,000 in the second year to fund activities through the Virginia Housing Trust
Fund (VHTF). This is an increase from the 2022-2024 Biennium Budget, which allocated
$75,000,000 in the first year and $75,000,000 in the second year to support the activities of the
VHTF.
At least 80 percent of the Fund is to be used for short, medium, and long-term loans to reduce
the cost of homeownership and rental housing. Up to 20 percent of the Fund may be used to
provide grants for targeted efforts to reduce homelessness.
The entities charged with administering the VHTF—DHCD and Virginia Housing (previously
named Virginia Housing Development Authority)—have extensive experience in implementing
the activities needed to carry out the provisions of the VHTF. For more than two decades,
Virginia Housing has originated and serviced loans through its bond and revenue programs,
developed its own internal housing and lending program policies, and serviced loans made with
federal funds administered by DHCD. While Virginia Housing is not a state agency, its board, like
DHCD’s, is subject to gubernatorial appointments.
Further, DHCD and Virginia Housing worked collaboratively to implement the provisions of the
Virginia Housing Partnership Revolving Fund, the predecessor to the VHTF. Both DHCD and
Virginia Housing are skilled at packaging affordable housing projects that include a range of
funding sources to leverage their resources. In fact, the budget language creating the VHTF
identified leveraging as an important component of its operation.
Input Into the Structure of the Housing Trust Fund
Significant stakeholder input shaped the development of the initial VHTF framework. Building
on this foundation, DHCD held regional in-person input sessions during November and
December 2024 to collect feedback from affordable housing, homeless services, and
community development stakeholders. Attendees were queried about the design and structure
of the Affordable and Special Needs Housing (ASNH) and Homeless and Special Needs Housing
(HSNH) programs, which administer the VHTF Competitive Loans and Homeless Reduction
Grants, respectively.
Regional Public Input Sessions
Location Date
Virtual (Southwest VA) November 21, 2024
Richmond, VA December 2, 2024
Woodbridge, VA December 5, 2024
Hampton Roads, VA December 10, 2024
Virtual (statewide) December 12, 2024
3
Additional input sessions were held during May and June 2025 to gather feedback on potential
changes to the ASNH Competitive Application for fiscal year (FY) 2026. DHCD extended
invitations broadly to DHCD grantees, partners, and the public, as well as posting invitations on
the Department’s website and in statewide news publications. More than 60 individuals
participated in these sessions.
ASNH Public Input Sessions
Location Date
Arlington, VA May 7, 2025
Varina, VA May 8, 2025
Newport News, VA May 13, 2025
Virtual May 22, 2025
Varina, VA June 23, 2025
Virtual June 26, 2025
Moreover, DHCD sought input from homeless services stakeholders across Virginia. During the
Virginia Governor’s Housing Conference in November 2024, DHCD held consultations with
individuals representing each of the Commonwealth’s 16 Continuums of Care. Attendees were
asked for feedback specific to the VHTF Homeless Reduction Grants. In addition to collecting
feedback from stakeholders, DHCD collaborates with peer organizations to assure strategic use
of VHTF resources. Over the past several years, DHCD has partnered with Virginia Housing and
state agencies within the Health and Human Resources Secretariat, including the Department
of Behavioral Health and Developmental Services, Department of Medical Assistance Services,
Department for Aging and Rehabilitative Services, Department of Health, Department of Social
Services, and the Department of Veterans Services to coordinate efforts and leverage resources
to increase housing options for people with serious mental illness, people with intellectual and
other developmental disabilities, and people who are chronically homeless. These efforts focus
primarily on the development of additional permanent supportive housing (PSH) units. The
VHTF has been used to construct new or rehabilitate existing housing into PSH units. In
addition, the VHTF provides funding for pre-development activities of PSH units and to provide
supportive services for those experiencing homelessness.
Parameters of the Housing Trust Fund
The 2012 Budget Bill (Special Session I) included language establishing the basic parameters for
the VHTF. These parameters included guidance on the allocation of funds for grants and loans,
a statement describing the types of activities eligible for grants or loans, and a list of the types
of organizations eligible to receive program funds. The budget direction also stressed the
importance of considering opportunities for leveraging and providing flexibility in loan
products.
4
To implement the provisions of the Appropriations Act, DHCD and Virginia Housing allocate
VHTF resources into the categories listed in the table below. For fiscal year 2025-2026, the
agencies propose to continue to allocate funds between these broad categories.
FY 2026 Virginia Housing Trust Fund Allocation
Loans
Competitive Loan Pool $70,500,000
Grants
Homelessness Reduction Competitive Grant Pool $14,000,000
Administration $3,000,000
Total $87,500,000
At the time of this report (December 2025), applications for the 2025-2026 VHTF Competitive
Loan Pool and Homeless Reduction Grants are being evaluated. Please note that any funding
not utilized under the Permanent Supportive Housing-Homeless Reduction Grants will be
allocated to the competitive loan pool the ASNH program administers at DHCD.
Affordable Housing Loan Program (Competitive Loan Pool)
At least 80 percent of the funds allocated to the VHTF must be used to provide loans that
reduce the costs of affordable rental housing and homeownership per § 36-142 Code of
Virginia. DHCD makes this portion of the VHTF funding available through the ASNH program,
which offers developers of rental housing and for-sale homes the opportunity to apply for
multiple sources of state and federal funding through a single application round opened twice
each year. In FY 2025, the application deadline for ASNH funding was November 1, 2024, and
How-to-Apply workshops were conducted on October 8, 2024, to provide guidance and
technical assistance to prospective applicant teams.
DHCD uses a competitive process to select projects for funding. In addition to VHTF, DHCD
administers funding from the federal program HOME Investment Partnerships and the National
Housing Trust Fund. VHTF requests are capped at $2,000,000 for affordable rental housing
projects and $700,000 for affordable homeowner housing projects. Please note that applicants
for rental housing projects are eligible for an additional $1,000,000 of federal funding between
the HOME and NHTF programs.
The criteria used to evaluate projects for funding includes the following: (1) direct impact on
one or more high priority state housing policies; (2) leveraging; (3) affordability; (4) financial
sustainability; (5) impact on local housing needs; (6) feasibility, (7) readiness, (8) coordination of
services and (9) the applicant’s administrative capacity. DHCD ranks competitive project
applications using a standardized review with a 100-point scale; projects must score at least 60
points to be eligible for funding. DHCD makes funding offers to the highest scoring projects in
descending order until available funds are exhausted or all projects scoring above 60 points
have been funded. Applicants may be asked to provide additional information to finalize
funding offers. Property funded through a VHTF loan is subject to a lien intended to ensure its
5
continued use as targeted, affordable housing during a specified period. The outstanding
balance on the loan is due in the event the affordability period is not met.
The ASNH program accommodates a variety of possible projects, and the program design is
updated annually to reflect a changing real estate market and the Commonwealth’s housing
priorities and initiatives. One such priority is the needed increase in available housing options
for Virginians with serious mental illness to support the state response to the U.S. Department
of Justice Settlement Agreement and the Governor’s Right Help, Right Now initiative. In FY
2025, rental housing developments that included supportive housing, such as those with a first
leasing preference or a percentage of units offered first to individuals with intellectual or
developmental disabilities and rental assistance from the Department of Behavioral Health and
Developmental Services (DBHDS), received a scoring preference and were eligible for an
increased VHTF award.
The competitive loan pool scores projects from 0 to 100 points in three primary categories:
- The proposed development’s ability to impact critical local housing needs (40 points),
- Proposed project readiness and feasibility (30 points), and
- The application team and developer’s capacity for completion and compliance (30 points).
Looking to FY 2026, DHCD anticipates that most of the funds in the competitive loan pool will
continue to be used to provide low-interest loans that are structured to meet the financing
needs of rental housing development projects, and DHCD will continue to give scoring
preference to projects that address critical housing needs and policy priorities, such as the
inclusion of permanent supportive housing first leasing preference units.
To ensure the long-term viability of affordable rental projects, DHCD will continue to give
priority consideration to projects that have an identified strategy for financial sustainability,
such as providing project-based rental assistance to income-qualified tenants. In keeping with
the direction that the loans provide flexible financing, DHCD sets repayment rates and terms for
each individual loan from the VHTF, and for FY 2026 offers as low as 0% interest-only payments.
In addition, provisions of the loan program will encourage applicants to pursue leveraged funds
from other sources such as the Low-Income Housing Tax Credit (LIHTC) program administered
by Virginia Housing and other federal and local housing programs such as HOME Investment
Partnerships Program, the National Housing Trust Fund, the Home Investment Partnerships
American Rescue Plan Program, and the Community Development Block Grant program.
Homeless Reduction Grant Program
Up to 20 percent of the funds allocated to the VHTF are permitted for the reduction of
homelessness. The Homeless Reduction Grant funds may be used for temporary rental
assistance, not to exceed one year, housing stabilization services in permanent supportive
housing for the chronically homeless, and predevelopment assistance for permanent
supportive housing for the chronically homeless. In accordance with budget language, priority
consideration will be given to efforts to reduce the number of homeless youth and families.
6
DHCD will select projects based on need, approach, local coordination, and capacity. As with
the loan program, projects will be selected for funding through a competitive application
process. Applicants may apply for the amount needed to administer the project, DHCD does not
anticipate entering into grant agreements for less than $25,000. The application period occurs
annually during the middle of summer and applications are reviewed through early fall. As with
the loan program, DHCD will rank competitive project applications using a standardized review.
DHCD will make funding offers to the highest scoring projects in descending order until
available funds are exhausted or all projects scoring above sixty points have been funded.
Applicants may be asked to provide additional information to finalize funding offers.
Organizations Eligible for Virginia Housing Trust Fund Allocations
Several types of organizations are specified in the Code and guidelines as being eligible to
receive funding through the VHTF. Local governments, local housing, and redevelopment
authorities; regional or statewide organizations providing affordable housing and homeless
assistance/services to Virginia residents; and holding companies expressly created for owning
and operating affordable housing are deemed eligible to apply for VHTF monies. Other eligible
organizations may also contract with a variety of other parties to assist in providing the housing
and other resources required to satisfy the conditions of the grant or loan product.
Virginia Housing Trust Fund Administration and Management
Funding for the VHTF is included in DHCD’s budget. DHCD works in collaboration with Virginia
Housing to carry out the provisions of the VHTF. DHCD and Virginia Housing have a proven
record of accomplishment in jointly administering statewide housing initiatives. In the late
1980s, the General Assembly passed legislation creating the Virginia Housing Partnership Fund
to improve the quality and affordability of housing throughout the Commonwealth. The
Partnership Fund was jointly administered by DHCD and Virginia Housing. DHCD set policy,
provided technical assistance to its housing development partners in responding to funding
opportunities, and selected projects for funding through a competitive application process.
Virginia Housing provided underwriting services and originated and serviced loans.
Based on the model of the Partnership Fund, DHCD and Virginia Housing jointly determine the
policy parameters of the VHTF. Specific aspects of the VHTF implementation are handled by the
individual agencies in accordance with their designated areas of expertise and responsibility.
With respect to the loan offerings, DHCD provides technical assistance during project
development. Virginia Housing, drawing on its more than 50 years of experience in mortgage
lending as the state’s housing finance agency, provides project underwriting for the Affordable
Housing Loan Program and performs loan origination, servicing, and monitoring for all program
loans. DHCD, which has more than 30 years of experience in managing federal and state grant
and loan programs for housing and community development, as well as extensive involvement
in homeless programs, administers the process to solicit applications for both the Competitive
Loan Program and the Homeless Reduction Grant Program. Overall responsibility for the
7
ongoing administration and monitoring of grants made through the Homeless Reduction Grant
Program falls to DHCD.
Evaluation and Analysis of Outcomes
The 2024-2026 Biennium Budget incorporated the requirement for reporting on the
performance of the Virginia Housing Trust Fund. Section 102.E.2 of the Budget requires that the
following outcomes are reported:
As part of the plan required by § 36-142 E., Code of Virginia, the department shall also
report on the impact of the loans and grants awarded through the fund, including but
not limited to: (i) the number of affordable rental housing units repaired or newly
constructed, (ii) the number of individuals receiving down payments and/or closing
assistance, (iii) the progress and accomplishments in reducing homelessness achieved by
the additional support provided through the fund, and (iv) the progress in expanding
permanent supportive housing options.
The number of individuals receiving down payment and/or closing assistance is not included in
the reporting as it is not in the program design for the VHTF. This is consistent with the creation
of the VHTF as the enabling legislation states the VHTF may provide funds to be used for down
payment and closing cost assistance for homebuyers. The agencies anticipate that additional
outcome measures will include housing units provided, with a special focus on units provided to
hard-to-serve target populations; services provided to support reducing homelessness; and the
degree to which other financial resources can be leveraged for housing.
Both public input and the perspectives of state agencies with concerns about housing for
special needs categories expressed the desire to see resources directed toward areas of need
addressed through crosscutting state policies. Improved interagency collaboration and
communication has clearly indicated a pervasive lack of affordable housing impedes progress
on a range of state policies. The evaluation will examine the extent to which the VHTF is able to
facilitate progress in addressing areas of priority need.
8
Summary of FY 2025 Utilization
FY 2025 Virginia Housing Trust Fund Allocation
Loans
Competitive Loan Pool $70,500,000
Grants
Homeless Reduction Grant Pool $14,000,000
Administration $3,000,000
Total $87,500,000
FY 2025 Summary for Competitive Loan Pool
- Approximately $116.3 million was requested for the $75 million VHTF made available in the
Competitive Loan Pool; 2 ASNH overall had $221 million requested with $158 million
available across all sources.
o 70 applications requested VHTF.
o 41 developments were awarded VHTF.
o Many projects will serve very low and extremely low-income populations that are
very hard to serve, such as chronically homeless and individuals with intellectual and
developmental disabilities.
- The Competitive Loan Pool created and preserved affordable housing units.
o $75 million invested to leverage more than $2.1 billion in other resources
o 2,969 affordable units will be created or preserved.
o 17 projects with Permanent Supportive Housing (PSH) units for a total of 184 PSH
units created.
- VHTF assisted in expanding affordable homeownership with 3 of the 41 awarded projects,
creating 25 for-sale units.
FY 2024 Summary for Homeless Reduction Grants (HRG)
- Over $18.5 million requested for $12 million was made available for Homeless Reduction
Grants in FY2024
o 72 applications
o 55 awards
- Homeless Reduction Grant contracts follow the calendar year from January 1 – December
31. Final CY 2025 service numbers will be reported in next year’s report.
- CY 2024 is the last complete year of Homeless Reduction Grant implementation. During CY
2024, the following households were served:
o 26 Rapid Rehousing projects served 1,283 households.
o 20 PSH projects served 1,001 households.
o 9 Underserved Population Innovation projects served 377 households.
2
Please note: the amount of funding available in the Competitive Loan Pool in FY2025 differs from the amount
provided in the annual allocation because of accrued interest from previously issued loans.
9
o A total of 2,661 households experiencing homelessness were served during CY 2024
with Homeless Reduction Grant funding.
10
Appendix B: Housing Trust Fund Snapshot FY 2025 Allocation
Trust Fund Grants Loans Totals
Components Homelessness Competitive
& Features
Reduction Loan Pool
Purpose Provide competitive grants Through a competitive process,
to local/ regional partners provide local/ regional partners
providing temporary (<1 with low-interest loans that will
year) rental assistance; assist in financing housing
housing stabilization projects that meet critical state
services in permanent housing policies.
supportive housing; and
pre-development for long- Project underwriting will tailor
term housing opportunities repayment rates and terms to
for the homeless. Require specific project needs. The
coordination with CoC. highest priority will go to those
demonstrating financial sustain-
ability and leveraging.
Prioritize projects serving
special needs populations—
ID/DD, Severe mental illness,
Permanent Supportive Housing
Funding $14,000,000 $70,500,000 $87,500,000
Available
($3,000,000
Administration)
Project Caps None – based on need. $2,000,000 per rental housing
project/ $700,000 for
homeowner housing projects
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