A roundup of developments worth watching, and what they mean for your projects
The policy environment for energy-efficient and affordable housing in Virginia is as active as we’ve seen in years. State-level program decisions, shifting federal incentives, and new construction standards are all moving at once, and they directly affect the economics of what our clients are building and managing.
Virginia Officially Rejoins RGGI: Fall Funding Round Confirmed
Governor Spanberger signed legislation rejoining the Regional Greenhouse Gas Initiative (RGGI) on July 1, 2026, ending several years of legal and political back-and-forth. RGGI requires power plants to purchase allowances for their carbon emissions, and Virginia directs a share of that revenue toward the Community Flood Preparedness Fund and the Housing Innovations in Energy Efficiency (HIEE) program. DHCD has now released the details: its FY27 ASNH (Affordable and Special Needs Housing) Rental Program Manual, updated in July, confirms roughly $52.2 million available for HIEE for the 2026–2027 program year, alongside the Virginia Housing Trust Fund, HOME, and National Housing Trust Fund as sources of ASNH rental gap financing. The Fall 2026 application window is open now, running August 5 through September 16.
Virginia Housing's 2027 QAP: A Shift Worth Watching
Virginia Housing’s proposed 2027 Qualified Allocation Plan removes the minimum energy efficiency requirements that have been in place for years. Green building certification programs remain available as an optional path to additional points. Final approval of the revised QAP is expected August 31, 2026.
Virginia Energy Plan
Virginia is also in the middle of its statutory 2026 Energy Plan process, a ten-year roadmap the state revisits every few years, this round focused on affordable electricity bills, grid reliability, and the path to a net-zero-carbon energy economy by 2045.
Federal Home Energy Rebates
Virginia’s long-delayed home rebate programs (roughly $160 million allocated for 2026) are still waiting on one thing: U.S. DOE approval of the state’s deployment plan, which Virginia Energy updated in response to revised federal guidance issued May 29, 2026. There’s still no launch date. Once approved, the Home Efficiency Rebate (formerly HOMES) program is expected to provide incentives (up to $4,000, and up to $8,000 for low-income households) for overall energy savings achieved through efficiency improvements, estimated in advance via an energy model or tracked after the fact via actual energy consumption. The High-Efficiency Electric Home Rebate (HEEHR), formerly the Home Electrification and Appliance Rebate (HEAR), retains incentives for HVAC, insulation, and appliances, with a maximum incentive of $14,000 for low-income households, though DOE’s updated guidance is narrowing what qualifies, phasing out fuel-switching projects (like converting a gas furnace to an electric heat pump) in favor of electric-to-higher-efficiency-electric upgrades only.
Section 45L Has Expired for New Construction
The Section 45L new-construction energy tax credit (up to $2,500 per unit for ENERGY STAR homes, up to $5,000 for Zero Energy Ready Homes) ended earlier than originally scheduled. Under the tax law signed in July 2025 (H.R. 1), the credit is no longer available for homes acquired after June 30, 2026. The one exception: if you had a binding written contract and a payment in place before that date, you can still claim the credit even if the home is completed later. If you’re not sure whether a project you were counting on 45L for falls inside that window, it’s worth checking now rather than at closeout.
ADUs and Energy Efficiency: A Natural Fit
Virginia’s ongoing zoning reform conversation around accessory dwelling units is creating real opportunity at the intersection of housing supply and energy performance. ADUs are often simple in design, built new, and well-suited for high-performing systems, making them a natural fit for efficiency standards that might be harder to achieve in larger, more complex projects. As localities expand ADU allowances under recent state legislation, there’s a genuine chance to add quality housing with extremely low energy costs.
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