Vermont Launches Grant Program to Rebuild After 2023 Floods

In a major step toward long-term recovery from the devastating July 2023 floods, Governor Phil Scott and the Vermont Agency of Commerce and Community Development (ACCD) have announced the opening of the application process for more than $67 million in federal disaster recovery block grants. These Community Development Block Grant – Disaster Recovery (CDBG-DR) funds, provided through the U.S. Department of Housing and Urban Development (HUD), aim to support the hardest-hit areas across the state.

The funding—totaling $67,845,000—was allocated as part of the American Relief Act of 2025, passed by Congress in December of last year. Vermont’s Department of Housing and Community Development (DHCD), which oversees the grant program, will prioritize recovery and resilience projects in counties designated by HUD and the state as Most Impacted and Distressed (MID). These include Washington and Lamoille counties—identified by HUD—as well as Caledonia, Orleans, Rutland, Windham, and Windsor counties, designated by Vermont officials.

“The July 2023 storms were devastating for many communities across Vermont,” said Governor Scott. “These grants will help ease the financial burden for much-needed infrastructure and new housing so we can continue to strengthen our long-term resilience.”

The funding is structured to ensure that at least 70% of the grants will benefit low- and moderate-income households. While a majority of the dollars will go toward building new housing units outside of flood-prone areas and strengthening infrastructure, some funds are also available to restore damaged infrastructure and support mitigation projects that will reduce the impact of future disasters.

No local match is required for the funds, easing the burden on municipalities that are still in recovery mode. To qualify, all proposed projects must demonstrate a clear connection to damages caused by the July 2023 flooding under FEMA Disaster Declaration 4720. Eligible uses include housing construction, infrastructure restoration, economic revitalization, and public service investments that address documented unmet needs tied to the storm.

The funding distribution follows months of public engagement and planning. Vermont submitted its formal CDBG-DR Action Plan to HUD on June 6, 2025. The federal agency approved the plan on July 18, after an extensive review and two public hearings—one in March and another in May—to gather input from residents and community leaders across affected areas.

Of the total grant amount, $54.3 million is reserved for HUD-identified MID areas, specifically Washington County and ZIP code 05656 in Lamoille County. The remaining $13.6 million will be available to support unmet needs in state-identified MID areas, including Caledonia, Orleans, Rutland, Windham, and Windsor counties.

ACCD is currently accepting pre-applications through its new grants management system, GEARS. The department is providing technical assistance to help applicants develop strong proposals, with a full application portal expected to open in late August. Full applications will be due by September 30, 2025, with the first round of awards anticipated by year’s end.

With these funds now moving into the application phase, Vermont continues to lead by example in its commitment to resilient, equitable recovery—ensuring that communities not only rebuild but emerge stronger and better prepared for the future.