Treasurer's Office Proposes Expanding LIAC to Back an Off‑site Housing Accelerator; Senators Ask About Risk
February 13, 2026 | Economic Development, Housing & General Affairs, SENATE, Committees, Legislative , Vermont
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Peter Trombley of the treasurer's office described the state Local Investment Advisory Committee (LIAC) program and three proposed changes to support an off‑site housing accelerator pilot.
"A brief refresher on what the 10% of Vermont program is," Trombley said, explaining LIAC allows the treasurer to invest a percentage of state cash holdings in longer‑term loans that are repaid to the state. He said LIAC has enabled roughly $120 million in housing loans to date and has supported about 1,700 units across the state.
Trombley outlined three proposals: raise the LIAC cap from 10% to 12.5% of state cash balances (the treasurer's conservative modeling put that increase at roughly $30 million of new lending capacity); redirect portfolio interest presently flowing to the general fund into a housing special fund for flexible deployment; and create a 1% credit facility (part of the 12.5% cap) to underwrite up to about $12 million in higher‑risk revolving loans to support pilot bulk purchasing or short‑term factory inventory purchases for an off‑site accelerator.
Trombley offered two pilot scenarios: (1) a developer could borrow from the 1% facility to reserve and buy factory‑produced units, site them and sell them to consumers, then repay the facility so funds revolve to the next borrower; (2) an intermediary could temporarily take title to factory units and hold inventory so factories have guaranteed orders and production gaps can be filled. Trombley said retained interest revenue could be used for loss reserves, underwriting or small grants to lower borrower costs.
Several senators raised concerns about increased exposure and the risk that manufactured units could fail to be sited or sold quickly under Vermont permitting norms. "If we're asking for additional risk, is that the best use of the state's funds?" one senator asked. Committee members also requested clearer modeling for projected cash balances, the demand side for bulk purchases and how the pilot would be deployed in practice.
No formal action was taken. The committee asked the treasurer's office and DHCD to provide further details and follow‑up materials for subsequent hearings.
"A brief refresher on what the 10% of Vermont program is," Trombley said, explaining LIAC allows the treasurer to invest a percentage of state cash holdings in longer‑term loans that are repaid to the state. He said LIAC has enabled roughly $120 million in housing loans to date and has supported about 1,700 units across the state.
Trombley outlined three proposals: raise the LIAC cap from 10% to 12.5% of state cash balances (the treasurer's conservative modeling put that increase at roughly $30 million of new lending capacity); redirect portfolio interest presently flowing to the general fund into a housing special fund for flexible deployment; and create a 1% credit facility (part of the 12.5% cap) to underwrite up to about $12 million in higher‑risk revolving loans to support pilot bulk purchasing or short‑term factory inventory purchases for an off‑site accelerator.
Trombley offered two pilot scenarios: (1) a developer could borrow from the 1% facility to reserve and buy factory‑produced units, site them and sell them to consumers, then repay the facility so funds revolve to the next borrower; (2) an intermediary could temporarily take title to factory units and hold inventory so factories have guaranteed orders and production gaps can be filled. Trombley said retained interest revenue could be used for loss reserves, underwriting or small grants to lower borrower costs.
Several senators raised concerns about increased exposure and the risk that manufactured units could fail to be sited or sold quickly under Vermont permitting norms. "If we're asking for additional risk, is that the best use of the state's funds?" one senator asked. Committee members also requested clearer modeling for projected cash balances, the demand side for bulk purchases and how the pilot would be deployed in practice.
No formal action was taken. The committee asked the treasurer's office and DHCD to provide further details and follow‑up materials for subsequent hearings.
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