State Foreclosure Law

Vermont Foreclosure Laws

Vermont is primarily a JUDICIAL foreclosure state. Foreclosure by nonjudicial sale is not allowed for farmland or a dwelling house owned by a natural person (12 V.S.A. § 4961), and strict foreclosure under 12 V.S.A. § 4941 et seq. is a court process.

Process

Judicial

Through the court system §

Foreclosure Length

Varies

Depends on the case

Homestead Exemption

$125,000

Automatic · the rule §

Deficiency Judgment

Limited

Allowed (with limitations) §

23 source pages cited · Last checked Mar 10, 2026

Not legal advice. This page provides general information about Vermont foreclosure law based on cited statutes and rules. Every citation links to the official source for verification. Laws change — readers should confirm current statute text and consult a Vermont-licensed attorney for situation-specific advice.

Facing foreclosure? The timeline, your rights and your options are laid out in the Vermont foreclosure guide →

On this page

01 Governing statutes
02 Foreclosure process and your rights
03 Special foreclosure types
04 Lien priority
05 Statute of limitations
06 Probate & inheritance
07 Consumer protection & compliance
08 Legal aid & pro bono resources
09 Find help in Vermont
10 National foreclosure guides
11 Vermont distress data

Governing Statutes

Citation	Title	Covers
12 V.S.A. § 4931 et seq.	Foreclosure of Mortgages (Judicial)	Primary framework for judicial foreclosure in Vermont. Governs the court process for foreclosure, decree of foreclosure, sale procedures, and redemption.
12 V.S.A. § 4631 et seq.	Mediation in Foreclosure Actions	Lets the owner-occupant of a home of four units or less request mediation in the foreclosure case, until four months after judgment and before the redemption period ends. The lender must serve a mediation notice with the summons and complaint and, in mediation, consider foreclosure prevention tools such as reinstatement, loan modification, forbearance and short sale. Mediation does not pause the redemption period.
12 V.S.A. §§ 4946, 4949	Redemption Period Before Sale	For farmland or a home the owner lives in as a principal residence, the decree gives six months from its date to redeem, unless the court orders a shorter time; for other property the redemption period is eliminated or cut to no more than 30 days. The borrower can also redeem at any time before the public sale by paying the full amount due under the judgment plus allowed post-judgment costs.
12 V.S.A. § 4941 et seq.	Strict Foreclosure	Provides for strict foreclosure where title vests in the lender without a sale. Requires court authorization. The court can order it only if there is no substantial value in the property beyond the debt owed to the lender and other lienholders plus unpaid property taxes, and any party can ask for a judicial sale instead.
27 V.S.A. § 101	Homestead Exemption	Establishes a $125,000 homestead exemption protecting equity in the primary residence from judgment creditors. Does not protect against mortgage foreclosure.

Vermont Foreclosure Process and Your Rights

Vermont uses judicial foreclosure. State law does not set one typical length from the first notice to the sale. §

After the sale: No redemption after the sale. Vermont's redemption period comes before the sale: for farmland or a home the owner occupies as a principal residence, the court sets it at six months from the date of the decree unless it orders a shorter time (12 V.S.A. § 4946(b)); for other property, the court eliminates it or cuts it to no more than 30 days (12 V.S.A. § 4946(c)). The homeowner can also redeem at any time before the public sale (12 V.S.A. § 4949(a)). §
Homestead exemption: $125,000. Protects up to $125,000 of equity in your primary residence from judgment creditors. Does NOT stop mortgage foreclosure. §
Mediation: Vermont has a statewide foreclosure mediation program: the Vermont Foreclosure Mediation Program. §

Step-by-step timeline, your rights at each stage, mediation, options to keep or leave the home, and what happens after the sale: Read the full Vermont foreclosure guide →

Special Foreclosure Types in Vermont

Beyond the standard judicial foreclosure process, Vermont law addresses several specialized foreclosure categories.

HOA & Condo Association Foreclosure

HOA and condominium association assessment liens may be foreclosed in Vermont, under 12 V.S.A. chapter 172, the same law that governs mortgage foreclosures (27A V.S.A. § 3-116(j)). §

Before suing to foreclose, the association must be owed at least three months of regular assessments, the owner must have failed to accept or keep a payment plan the association offered, and the association's board must vote to foreclose on that unit (27A V.S.A. § 3-116(m)).

Tax Lien Foreclosure

Property tax liens have priority over mortgage liens in Vermont. §

If the owner owes at least $1,500 and has been delinquent for more than one year, the town tax collector can sell the property itself at a public tax sale, but only after offering a written repayment plan that the owner declined, did not answer within 30 days, or did not keep (32 V.S.A. § 5252).

Lien Priority in Vermont

Generally first in time, first in right under Vermont recording statutes.

Condominium assessment liens may have limited priority (6 months of assessments) under 27A V.S.A. § 3-116. Consult a local attorney for specific lien priority questions.

Statute of Limitations in Vermont

Mortgage Foreclosure

Varies §

Vermont law sets several time limits that could apply: an action to recover land or its possession must be started within 15 years after the cause of action accrues (12 V.S.A. § 501); most other civil actions, within six years (12 V.S.A. § 511); and an action to enforce a note payable at a definite time, within six years after its due date or accelerated due date (9A V.S.A. § 3-118(a)). Which one governs a given foreclosure is a question for a local attorney.

Written Contracts

6 years

Promissory Note

6 years §

For a note payable at a definite time: six years after the due date, or after the accelerated due date if the lender accelerated the loan. Different rules apply to notes payable on demand (9A V.S.A. § 3-118(b)).

Deficiency Judgment

Varies §

The lender may request a deficiency judgment in the foreclosure complaint and must request it before the court issues the order confirming the sale; failing to request it waives any deficiency judgment against the borrower (12 V.S.A. § 4954(d)). Consult a local attorney for specific deadlines.

Probate & Inheritance in Vermont

When a mortgaged property owner dies, foreclosure proceedings interact with the probate process. Vermont law establishes specific rules for estate notification, heir protections, and the rights of executors to cure defaults.

Pause When the Borrower Dies

State law doesn't pause a foreclosure when the borrower dies, so it can go on during probate.

Notification to Estate

The lender must notify the estate or personal representative before proceeding.

Foreclosure must be served on the personal representative or estate of a deceased borrower.

Heir Protections

Heirs who inherit and occupy the property as a primary residence may qualify as successors in interest under 12 CFR 1024.31 and apply for loss mitigation.

Executor Reinstatement Rights

No specific statutory right for executors to reinstate.

Garn-St. Germain Act

Due-on-sale clause may not be enforced against heirs inheriting and occupying the property as a primary residence under Garn-St Germain, 12 U.S.C. 1701j-3.

Uniform Partition of Heirs Property Act (UPHPA)

Not adopted in this state.

Consumer Protection & Compliance in Vermont

State consumer protection statutes, foreclosure rescue fraud laws, and professional compliance rules that apply to mortgage servicing and foreclosure-related services in Vermont.

UDAP Statute

Vermont Consumer Protection Act (Consumer Fraud Act) §

Prohibits deceptive and fraudulent business practices.

Foreclosure Rescue Fraud Laws

No specific foreclosure rescue fraud statute.

General consumer protection under 9 V.S.A. § 2451 et seq. covers deceptive foreclosure rescue practices. Strong private right of action.

Attorney Advertising Rules

Vermont Rules of Professional Conduct govern attorney advertising and solicitation.

Lead Generation Restrictions

No Vermont-specific lead generation statute for foreclosure defense identified beyond professional conduct rules and general consumer protection.

Barratry

Barratry statutes apply. Solicitation of foreclosure-related legal work is restricted.

Vermont professional conduct rules prohibit in-person solicitation of prospective clients in vulnerable circumstances.

Legal Aid & Pro Bono Resources in Vermont

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Vermont Legal Aid

Free civil legal services for low-income Vermont residents, including housing and foreclosure defense. Income eligibility requirements apply. Can assist with foreclosure mediation preparation.
vtlegalaid.org →
🏠

HUD-Approved Housing Counselors

Free, federally funded housing counseling agencies in Vermont. Services include loan modification applications, mediation preparation, and loss mitigation guidance.
Find a counselor in Vermont →
📞

HUD Housing Counseling Hotline

Free foreclosure prevention counseling.
1-800-569-4287 →
📞

Vermont Legal Aid

Free legal assistance for low-income Vermont residents statewide.
1-800-889-2047 →
📞

Vermont Housing Finance Agency (VHFA)

State housing programs and homeownership preservation referrals. The Homeowner Assistance Fund (HAF) is closed to new applications.
802-652-3400 →
📞

Vermont Attorney General Consumer Assistance Program

Report mortgage fraud and consumer protection violations.
1-800-649-2424 →
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Vermont 2-1-1

Statewide referral service for housing, utility, and social service assistance.
2-1-1 →
📋

Vermont Bar Association Lawyer Referral Service

State bar lawyer referral service.
vtbar.org →
🎓

Vermont Volunteer Lawyers Project

Coordinated through the Vermont Bar Association; provides pro bono legal representation for qualifying low-income residents including housing matters.
vtbar.org →

Find Help in Vermont

We maintain a verified directory of free and low-cost help providers in Vermont. All are government-approved or federally funded.

7 HUD-approved housing counselors Free foreclosure prevention counseling 1 Legal aid offices Free legal representation for qualifying homeowners 41 Credit counseling agencies DOJ-approved pre-bankruptcy credit counseling 46 Debtor education providers Required post-filing debtor education courses

Browse all 95 providers in Vermont →

National Foreclosure Guides

These guides explain foreclosure at the federal level — homeowner rights, available options, and recommended steps at each stage. They apply in every state, including Vermont.

Facing Foreclosure?

Overview of the process, available options, and free help resources

How to Stop Foreclosure

Immediate options — forbearance, modification, legal aid, bankruptcy

Your Rights in Foreclosure

Federal protections under CFPB Regulation X and loss mitigation rules

How Foreclosure Works

Stage-by-stage walkthrough from missed payments to sale

Behind on Your Mortgage?

Options for borrowers who have missed or expect to miss a payment

Bankruptcy & Foreclosure

How Chapter 7 and Chapter 13 can stop or delay foreclosure

Vermont Distress Data

The American Distress Index tracks household financial distress at the national level. Here are ADI indicators with particular relevance to Vermont homeowners:

Foreclosure Filings

National trend

National foreclosure filings. Vermont mainly uses judicial foreclosure (through the courts).

FHA mortgage delinquency

FHA delinquency rate

Share of FHA loans at least one payment behind, from the Mortgage Bankers Association's quarterly survey.

Foreclosure volume

Foreclosure starts & completions

Monthly foreclosure starts and completions from ATTOM Data Solutions.

Newly late mortgages

Current to 30 days late

Share of mortgages moving from current to 30 days past due, from Cotality (formerly CoreLogic).