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Existing Homes Mortgage Incentive

Colorado Energy Saving Mortgage Incentive for Existing Homes

The Colorado Energy Office is providing up to a $6,000 incentive for the purchase of an existing home that receives energy efficient or renewable energy upgrades within 120 days of purchase or has its efficiency improved through a  refinance on a 1st mortgage .  The program was developed out of House Bill 13-1105, legislation that was signed into law, in June of 2013, by Governor Hickenlooper.   The incentive builds upon a previous mortgage program run by the Colorado Energy Office and developed with professional lending institutions. 


The tiered benefit is based on the estimated reduction in the HERS Index Rating from the selected energy efficient and/or renewable energy improvement.   The HERS Index is a measure of home energy use and is similar to a mile per gallon (mpg) rating on a car.  Unlike a mpg rating, homes that have lower HERS Index Ratings are more efficient than homes with higher ratings. For more information on the HERS Index Rating.


The cost of the selected improvements must meet or exceed 2% of the loan amount (minimum capped at $6,000 for mortgages with a balance greater than $300,001). Recommendations must prioritize energy efficiency improvements; specifically the following three when appropriate: air sealing, adding insulation to meet 2009 IECC levels and installing an ENERGY STAR certified heating system if less than 80% AFUE furnace before solar or other improvements are completed. The benefit is a matching program, where the incentive is split equally between state funds and non-state contributions*.  

The tiered incentive levels are as follows:

HERS Index Rating Improvement of 10 to 20 points** $2,000 benefit not to exceed half the improvement cost.
HERS Index Rating Improvement of 21-35** $3,000 benefit not to exceed half the improvement costs.
HERS Index Rating Improvement of 36-50** $4,000 benefit not to exceed half the improvement costs.
HERS Index Rating Improvement of 51-65** $5,000 benefit not to exceed half the improvement costs


A lender can participate in the existing home program by following these six steps:

  1. Work with a home buyer that is buying an existing home in Colorado
  2. Reserve the incentive amount before closing based on the estimated HERS Rating of the selected improvements by emailing the reservation form to ceo_grants@state.co.us.  Click here for program guidelines and the reservation template
  3. Provide the home buyer the reservation confirmation emailed from the Colorado Energy Office to the lender.  The email is the only confirmation of incentive reservation from the CEO.
  4. The borrower signs the program participation agreement.  Click here for agreement
  5. The incentive is provided to the borrower on the HUD-1 at the time of closing, including the State portion of the incentive and is based on the estimated HERS Index Rating.
  6. Provide the CEO an invoice and program required documentation.  Click here for billing guidelines and billing template.
*If non-state match is greater than .50% of the mortgage balance, the CEO will cover the difference between the non-state match and .50% of the mortgage balance.

**Based on a Maximum HERS Rating of 150. If a home’s initially rates at a 170, the improvements must get the home to 140 (a 30 point reduction, but only 10 points from the maximum of 150).  A home that initially rates at a 110 must make improvements to at least rate 90 on the scale in order to receive the incentive.