Four years ago, Champlain Housing Trust took a bold — and legally untested — step to try to help people of color buy homes in Vermont.
Backed by a private grant, the nonprofit land trust launched a program that provided up to $25,000 toward the down payment on a home in the land trust’s portfolio in northwest Vermont. The bold, untested part: Only Black, indigenous and other people of color could apply.
The new approach was intended to compensate for decades of overt and covert racism in lending that contributed to today’s reality in Vermont, where 75% of white residents own their homes but only 33% of Black Vermonters own theirs.
The new program chipped away at that inequity. The proportion of minority homebuyers in the land trust’s shared equity program doubled over the next two-and-a-half years, to more than 40% of new buyers, the organization said at the time. The trust added another $1 million in philanthropic funding to the program in 2024 and expanded it statewide.
Then, earlier this year, the Homeownership Equity Program disappeared.
The nonprofit made no public announcement about its end and removed references from its website, including years-old press releases about the program’s inception and expansion.
Champlain Housing Trust wasn’t the only organization to roll back a program that earmarked financial aid for Vermonters of color. Around the same time, the Federal Home Loan Bank of Boston and the Vermont Community Loan Fund scrubbed racial eligibility requirements from similar initiatives that aimed to help homebuyers and entrepreneurs, Vermont Public has learned.
The demise of these racial justice programs came as the Trump administration sought to unwind “diversity, equity and inclusion” initiatives nationwide that had been endorsed by the Biden administration. Programs that used race as an eligibility criteria — even when intended to support disadvantaged groups — have been a particular target for the current administration, which views them as discriminatory and illegal.
Fearing a crackdown, many businesses and nonprofits that use federal funding have made preemptive changes to written policies or renamed committees to eschew equity language.
The changes to the lending programs are noteworthy because they affect millions of dollars that had been set aside for people of color in the country’s least diverse state.
The Vermont Community Loan Fund made changes to a microloan program for low net worth entrepreneurs this year after concluding that its race-based criteria would jeopardize federal funding, executive director Will Belongia acknowledged in an interview.
“I don’t want to lose the ability to bring in capital to serve our communities,” he said.
The other organizations were more circumspect.
Champlain Housing Trust declined to discuss its Homeownership Equity Program. In a brief statement, spokesperson Chris Donnelly noted that the trust had created the program with “charitable dollars” following guidance issued by the Biden administration.
“When the guidance changed, we ended the program,” the statement read.
In a separate statement, the Federal Home Loan Bank of Boston did not even acknowledge its previous use of race-based criteria in its down payment assistance program, Lift Up. A spokesperson did not respond to follow-up questions.
The loss of these tailored programs is a setback for racial justice in Vermont, said Ana Mejía, a housing counselor who chairs the Rutland Area NAACP’s economic development committee.
"This is a real missed opportunity to build trust, to uphold their commitments to addressing racial disparities."Ana Mejía, Rutland Area NAACP
Mejía doesn’t fault the organizations for ending or changing their programs in order to preserve other important work that also can benefit people of color.
But Mejía said she was disappointed that the organizations chose not to explain their decisions publicly.
“This is a real missed opportunity to build trust, to uphold their commitments to addressing racial disparities,” she said. “I think that then leaves the federal government with the last word.”
‘Special purpose’
The federal Fair Housing Act bars racial discrimination in housing.
However, a related law called the Equal Credit Opportunity Act allows lenders to create “special purpose credit programs” for the benefit of an “economically disadvantaged class of persons.”
The Biden administration issued guidance in 2021 stating that special purpose credit programs could be tailored to customers in protected classes, such as race, under certain circumstances.
Champlain Housing Trust became one of the first organizations in the country to put that guidance into action.
Its Homeownership Equity Program allocated a $3 million gift from New England Federal Credit Union toward forgivable loans for BIPOC homebuyers who purchased a home through the trust’s existing shared equity program.
The approach set aside funds for people of color at a time when soaring housing prices were increasing demand for homeownership assistance across Vermont. It also allowed for more targeted outreach to people of color, director of homeownership Julie Curtin told Seven Days at the time.
“If we’re going to do a program to address [housing discrimination] and increase Black homeownership and address inequities, we should have a program that’s direct about it,” she told the paper.
The program sought to acknowledge how the historic use of restrictive covenants, redlining and other discriminatory practices had left many people of color without the sort of generational wealth that enables many white Vermonters to afford a home.
Curtin told Seven Days that the trust’s leaders believed the Biden administration’s guidance insulated the program from a legal challenge.
At least 28 people of color have since made use of it, according to the most recent published figure that Vermont Public was able to locate. The first recipient was a 51-year-old Burlington-area woman who had not been able to afford a condo despite working full-time, Vermont Public reported at the time.
Another woman, a former refugee from the Republic of the Congo, combined the assistance with several other sources of support — including the Vermont Housing & Conservation Board, state affordable housing tax credits, the City of Burlington’s Housing Trust Fund and Green Mountain Habitat for Humanity, to purchase her first home in 2022.
Two years later, Champlain Housing Trust allocated another $1 million to the program using funds from a $20 million gift by philanthropist MacKenzie Scott. It also partnered with nine other housing agencies to expand the offering statewide.
The housing trust’s work caught the attention of the Vermont Community Loan Fund, which was evaluating its own microloan initiative.
The nonprofit alternative lender had launched its program in 2022. During a pilot phase, the fund offered small, 0% loans to low net-worth businesspeople of any race.
After making 31 loans totaling just over $1 million, the organization studied ways to improve the program.
Its leaders spoke with Champlain Housing Trust and decided to retool their program last year as a race-specific special purpose credit program, Belongia said.
The goal, he said, was to bring the organization in closer contact with entrepreneurs of color who might be unfamiliar with lending systems or reluctant to make use of them.
“How do we understand their needs, and can we create a resource that would allow us to understand those needs better?” Belongia said.
The program issued 19 loans worth $640,000 in 2025, according to its annual report, including to Black-owned food and apparel businesses.
‘Remove any references’
In recent months, the Trump administration formally rescinded the Biden administration’s guidance around special purpose credit programs.
The U.S. Department of Housing and Urban Development then launched an investigation into Wells Fargo, contending that the for-profit bank’s special purpose credit programs intended to help Black customers may have violated the Fair Housing Act.
In announcing the probe on Oct. 7, HUD Secretary Scott Turner described the use of racial criteria in lending as “immoral” and “un-American” and said that Wells Fargo employees “should be ashamed of themselves.”
Champlain Housing Trust is one of the largest developers and lessors of affordable housing in Vermont.
Months before news of the Wells Fargo investigation broke, Champlain Housing Trust officials were already worried that the trust’s racial equity program would jeopardize its access to federal funds, an email obtained by Vermont Public indicates.
In a March missive to the trust’s partner housing agencies, Curtin explained that the trust was halting its Homeownership Equity Program because of “explicit requirements” of a federal program that was supporting one of the trust’s unrelated housing projects.
Curtin characterized the end of the down payment program as a “pause” but asked the partnering agencies to “remove any references to the program in your marketing materials, presentations, websites, etc.”
Trust spokesperson Donnelly said references to the program were deleted to avoid confusion among prospective applicants.
The Vermont Community Loan Fund took a different approach with its microloan program. Rather than end its Justice Forward Fund, the nonprofit reverted to its original eligibility criteria, which focused solely on financial means, Belongia said.
It was a subtle change. The nonprofit still describes the program online as serving “BIPOC Vermonters” and business owners with a net worth below $63,000.
But the application document itself states that providing racial information is optional and will not influence the applicant’s loan outcome.
"I don’t want to lose the ability to bring in capital to serve our communities."Will Belongia, Vermont Community Loan Fund
The Federal Home Loan Bank of Boston, whose members include several Vermont banks, appears to have made a similar change.
Launching a special purpose credit program for people of color was included as a performance benchmark used to evaluate and award bonuses for the organization’s leaders in 2023, according to U.S. Securities and Exchange Commission filings. The bank introduced the Lift Up Homeownership program that year, offering up to $50,000 in down payment and closing cost assistance to homebuyers of color across New England.
References to first-time homebuyers of color were removed from the Lift Up program webpage sometime between October 2025 and January 2026, Vermont Public determined by comparing archived web pages. The program description now references only “income-eligible first-generation homebuyers.”
Vermont Public could not locate any public acknowledgement of a change in the eligibility requirements.
In a statement, the bank said it is “committed to supporting our members so they can assist low-income and moderate-income individuals and families throughout New England with their homeownership goals through the continuation of three homeownership assistance programs — Equity Builder Program, Housing Our Workforce, and Lift Up Homeownership.”
Other approaches
Mejía, of the NAACP of Rutland, said the brief tenure of race-tailored programs helped encourage lenders to work with BIPOC-centered organizations such as hers.
Through her work, she knows Vermonters of color want to own homes and start businesses. However, some are reluctant to seek out those opportunities, especially if they have a lower credit score or if someone they know has had a bad experience applying for a loan.
“If they don't see that pathway, they’re not going to try,” she said.
Mortgage data indicates that people of color continue to be underrepresented in homebuying. White Vermonters made up a disproportionally large share of mortgage applications and issued mortgages in 2025, according to federal data, and they were less likely than people of color to have their applications denied.
Special purpose credit programs provided a clear way to signal that people of color are welcome to apply.
But the state is also trying other ways to reach them.
In 2022, Vermont lawmakers began allocating some state funds for down payment assistance grants to first-generation homebuyers. The program, administered by the Vermont Housing Finance Agency, does not include a racial eligibility component.
However, lawmakers directed the agency to develop an outreach plan to the Vermont chapters of the NAACP and other groups to ensure that the grant opportunities “are effectively communicated, and that funds are equitably available, to communities of Vermonters who have historically suffered housing discrimination.”
The program has awarded more than $2.7 million in down payment grants to 184 first-generation homebuyers. The funds — $15,000 per recipient — have been used to buy starter homes and condos with a median price of $250,000.
Over the last four years, 31 grant recipients — 17% — have been people of color.
