Loan Programs

VMBB issues low interest, tax exempt, taxable, and tax credit bonds for eligible municipal projects.

General Obligation Bonds may be used for

  • Purchase of land
  • New construction and renovation of town or school buildings
  • Purchase of equipment
  • Infrastructure installation and repairs
  • Water supply systems and Wastewater systems
  • Refinance certain types of outstanding debt

Revenue Bonds may be used to fund

  • Electrical generation systems
  • Water supply and wastewater systems
  • Solid waste districts
  • Electrical, gas and heating generation/transmission districts
  • Tax incremental financing districts

Why finance through the Bond Bank?

  • Lower Interest Rates
    Because the VMBB is highly rated by national bond rating agencies, the Bond Bank is able to issue bonds at very low interest rates. The low rates are passed on to our municipal borrowers.
  • Credit Enhancement and Security
    When advantageous to do so, the VMBB will obtain bond insurance to improve its underlying credit rating. The VMBB also receives support from the State of Vermont through its moral obligation and state intercept program.
  • Reduced Costs of Issuance
    by forming a pool of borrowers, the VMBB is able to achieve economies of scale and substantially reduce the cost to issue municipal bonds.
  • Simplification
    The VMBB has the staff and consultants in place to develop the bond financing and ensure the bonds are issued with the cheapest possible interest rates.
  • Ongoing Federal Disclosure
    VMBB has developed post-issuance compliance procedures that substantially reduce the burden for a municipality to comply with IRS rules, regulations and reporting.

Anatomy of a VMBB municipal loan

Municipality issues its bonds to the VMBB


VMBB uses the municipal bonds as collateral, forms a pool of municipal borrowers and issues its own bonds in the national bond market


VMBB uses its bond proceeds to make loans to Municipal borrowers


Municipal borrowers use the loan proceeds to pay for their capital projects


Municipal borrowers repay their loans


VMBB uses the municipal loan repayments to pay off its bonds