In 1986, Vermont was in crisis.
"There was a recognition that many people couldn't afford the homes that they lived in, and that it was getting worse," recalls Jim Libby, former general counsel for the Vermont Housing & Conservation Board (VHCB) and a founding VCLF Director.
"It was the mid-1980s, so federal housing programs were being slashed. There was this feeling: 'The federal government's not going to step up and do the right thing here. If we want to get anything done, we're going to have to do it ourselves.'"
A small group of central Vermonters began to think about a new approach to housing, community development and social justice. "It was simple: lending local money locally, using our money in our community," remembers Larry Mires, now VHCB's administrative officer.
The idea was, and remains, a progressive one. That money could then be loaned out to projects serving Vermont communities. As loans were paid back, the capital could be loaned out again, for as long as investors wanted to keep their money in the Loan Fund. More than a one-time grant or hand-out, these dollars would have impact in our communities over and over again.
Investors might still choose to earn a little interest, but financial return was only one consideration. "We weren't proselytizing," Mires (also a founding VCLF Director) chuckles now, "but we were telling people that the return on their investment isn't just financial, it's community."
It was a novel concept, but Vermonters jumped at it. Within the first year (1987), Vermonters had invested $309,000. Our first loan -- $5,075, to the Brattleboro Area Community Land Trust – allowed them to make a deposit on land purchased for affordable housing. It was quickly paid back, and lent out again, this time to the Central Vermont Community Land Trust for a project in Montpelier. By 1990, we'd lent more than $1 million to support 26 affordable housing projects throughout the state.
We believed that, if given the choice, Vermonters would want to do more with their money.
And we were right!
Since those early days, the scope of our lending has expanded to include community facilities, other nonprofits, child care programs large and small, and many other local businesses of all shapes and sizes. Our business development and financial counseling programs ensure that our borrowers have the tools they need to succeed. The Loan Fund has continued to grow, thanks to our investors' vision of a stronger, more inclusive, more just Vermont.