Energy Efficiency Interest Rate Reduction Program
Administered by Alaska Housing Finance Corporation
Alaska Housing offers interest rate reductions when you purchase a new or existing energy-efficient home or improve your current home's energy rating. If buying a 6 Star or 5 Star Plus rated home, you can receive a rate reduction on the first $250,000 of your loan—with greater savings if your property has no access to natural gas. If improving an existing home, you'll get a rate reduction based on how many energy-rating steps you achieve (minimum one step and 5 points), which you must complete within one year of closing and document to your lender.
This AHFC program creates loan incentives for your customers purchasing energy-efficient homes or making energy improvements. You should notify AHFC at application if the borrower intends to participate; for renovation projects, customers must obtain an initial energy rating, complete improvements, get a final rating, and submit documentation within 30 days of the final rating to qualify. Rate reductions range from -0.125% to -0.750% depending on the property's gas access and either the home's energy star rating (for purchase) or the number of rating improvement steps achieved (for renovations).
AHFC administers rate reductions on the first $250,000 of loans (or $200,000 for commitments before 10/1/24) for residential properties that achieve specified energy ratings or improvement thresholds. The program targets homebuyers of efficient new/existing homes and owners making energy improvements, with larger incentives for properties without natural gas access. Lenders submit applications, and AHFC modifies interest rates post-closing once energy ratings are completed; all homes constructed after 1992 must meet the BEES standard, and new construction must exceed minimum requirements.
Program details
- Program ID
- 1497
- Last updated
- 7/30/2025
Eligibility
- Sectors
- residential low income residential
- Technologies
- comprehensive measures/whole building custom/others pending approval
Program summary
The Alaska Housing Finance Corporation (AHFC) offers interest rate reductions to home buyers purchasing new and existing homes with 6 Star and 5 Star Plus energy ratings, or making energy improvements to existing homes. All homes constructed after 1992 must meet the AFHC Building Energy Efficiency Standard (BEES). New construction must exceed the minimum BEES requirements. Any property that can be energy rated and is otherwise eligible for AHFC financing may qualify for this program.
For new and existing home purchases that are rated 6 Star or 5 Star Plus, applicants are eligible for an interest rate reduction for the first $250,000 of the loan amount, with a blended interest rate applying to the remainder of the loan amount. The rate reductions are dependent on a property's access to natural gas and the energy rating of the home. Homes without access to natural gas receive a greater interest rate reduction than homes with access to natural gas.
For existing homes making energy improvements, a rate reduction is available for applicants, based on the number of steps of improvement to the energy rating of the property. An applicant should have the lender contact AHFC to inform them that the borrower intends to participate in the rate reduction program. After loan closing, energy improvements should be completed within one year. After an energy rating has been completed, AHFC will modify the interest rate accordingly. The program is available through AHFC-approved lenders.
Contact & resources
- Contact email
- cbolling@ahfc.us
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
