Funding Feature: Housing Innovations in Energy Efficiency (HIEE)

HIEE Funding

DHCD’s Housing Innovations in Energy Efficiency (HIEE) funding makes energy efficient upgrades possible in new and existing developments. The funding is a result of Virginia’s participation in the Regional Greenhouse Gas Initiative (RGGI), which began in 2020. The proceeds from RGGI have resulted in $95 million being allocated to the HIEE funding for the 2024 fiscal year.  HIEE is a noncompetitive source with a 0% interest rate. This funding has a $2,000,000 or 10% of Total Improvement Costs maximum request cap (no minimum) and focuses on households at 80% or below AMI. DHCD is typically looking for projects starting construction in the next 12 months.

The project being considered must have been awarded another competitive ASNH source of funding (HOME, HTF, VHTF). That source can be procured simultaneously to HIEE in DHCD grant rounds. If at least one of those competitive sources has already been awarded, you can enter in for HIEE funding with additional supporting documentation. In this way, this grant lends itself well to gap funding for projects that need additional funds.

Open Door Community

Open Door Community (ODC; previously HOPE) is a charitable organization operating out of Wytheville, VA that focuses on housing and food access for the five-county area of Bland, Carroll, Grayson, Smyth, and Wythe, as well as the city of Galax.  ODC is using HIEE funding in their current development, Fairview Townhomes. This 12-unit development is made possible through a combination of ASNH funding through the Virginia Housing Trust Fund, HIEE, equity and a permanent loan through Virginia Housing REACH funds. The land procured was a vacant town block, already zoned R3 for multifamily housing.

Some of the energy efficient features of this development include high density cellulose spray insulation, energy efficient water heaters, strategically placed upgraded windows and air circulators onto the HVAC system. HIEE adds value to this development, not only in the added efficiencies and sustainability of the greener systems, but also by making the operating costs and utility bills more sustainable for the tenants. Stidham recommends seeking out and architect or builder partner that has worked with HIEE or other energy efficient sources of funding in the past, since they typically have recommendations and ideas for what can work for the property and increase the efficiency.

Open Door Community has made a commitment to have at least 1/3 of their units developed designated for neighbors with critical needs, such as domestic violence survivors. In the case of Fairview Townhomes, the 4 units will be set aside for tenants with IDD.

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Applying for HIEE

To apply for the HIEE funds, predevelopment can help an application be more competitive. An Environmental Assessment is required for the application process. A geotechnical review as well as financial feasibility or existing designs are all suggestions to bolster the application. Virginia Housing’s Pre-Development loan could be beneficial in this case to fund the pre-development work.  

DHCD still has HIEE allocated funding for FY 2024 (the Spring 2024 application round), although the long-term fate of these HIEE funds remains precarious. Virginia Governor Youngkin’s administration has attempted to withdraw from RGGI through both executive order and regulatory mechanisms (read more in the Charlottesville Today article here). If Virginia withdraws from RGGI, it is possible that the funds may be reallocated by the General Assembly for FY 2025 and would not be available for the Fall 2024 round. 

As of September, DHCD projected to have the Spring application round from February 5th – March 8th, 2024.

Special thank you to Jordan Stidham, the Director of Finance and Development at Open Door Community as well as Chloe Rote, Carly Blake, and Jordan Meadows from DHCD.

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