Vermont groups drop race-based lending rules

Champlain Housing Trust, the Federal Home Loan Bank of Boston, and the Vermont Community Loan Fund recently adjusted their lending programs to remove race-based eligibility requirements. These changes came as the Trump administration moved to unwind diversity, equity, and inclusion initiatives that had been endorsed by the Biden administration. The groups altered or ended programs that had specifically targeted people of color for financial assistance.

Champlain Housing Trust ended its Homeownership Equity Program earlier this year without a public announcement. The nonprofit removed references to the initiative from its website, including press releases about its launch and expansion. Spokesperson Chris Donnelly stated that the trust created the program with charitable dollars following guidance issued by the Biden administration. Donnelly said that when the guidance changed, the organization ended the program to avoid confusion among prospective applicants.

The trust’s program had provided up to $25,000 toward down payments for Black, Indigenous, and other people of color buying homes in its portfolio. Launched four years ago, the initiative aimed to address a homeownership gap where 75% of white Vermonters own their homes compared to 33% of Black Vermonters. The program doubled the proportion of minority homebuyers in the trust’s shared equity program to more than 40% over two and a half years. At least 28 people of color used the assistance, including a former refugee from the Republic of the Congo who purchased her first home in 2022.

In March, director of homeownership Julie Curtin emailed partner agencies to explain the halt. She characterized the end as a pause but asked partners to remove any references to the program in marketing materials and presentations. The trust had allocated a $3 million gift from New England Federal Credit Union to the program initially. It added another $1 million in 2024 from a $20 million gift by philanthropist MacKenzie Scott and expanded the offering statewide with nine other housing agencies.

The Vermont Community Loan Fund took a different approach with its Justice Forward Fund. Executive director Will Belongia said the nonprofit reverted to its original eligibility criteria, which focused solely on financial means, to protect federal funding. Belongia stated, “I don’t want to lose the ability to bring in capital to serve our communities.” The fund’s online description still mentions BIPOC Vermonters, but the application now states that providing racial information is optional and will not influence the loan outcome. The program issued 19 loans worth $640,000 in 2025 to businesses, including Black-owned food and apparel companies.

The Federal Home Loan Bank of Boston made similar changes to its Lift Up Homeownership program. The bank offers up to $50,000 in down payment and closing cost assistance across New England. References to first-time homebuyers of color were removed from the program webpage between October 2025 and January 2026. The description now lists only income-eligible first-generation homebuyers. A spokesperson for the bank did not respond to follow-up questions about the change in eligibility requirements.

The shifts followed the federal rescission of 2021 guidance that allowed lenders to create special purpose credit programs for economically disadvantaged classes. The Department of Housing and Urban Development launched an investigation into Wells Fargo in October, arguing its race-based programs may have violated the Fair Housing Act. HUD Secretary Scott Turner described the use of racial criteria in lending as immoral and un-American on Oct. 7.

Ana Mejía, a housing counselor who chairs the Rutland Area NAACP’s economic development committee, called the loss of these tailored programs a setback for racial justice in Vermont. She said the organizations missed an opportunity to build trust by not explaining their decisions publicly. Mejía noted that this leaves the federal government with the last word on how Vermont addresses historical lending disparities.