HOMES Rebate Program — Eligibility, Amounts, and How to Apply

The HOMES (Home Owner Managing Energy Savings) Rebate Program is a federally funded, state-administered initiative created by the Inflation Reduction Act to help homeowners reduce energy consumption through whole-home efficiency improvements. With rebates ranging from $2,000 to $8,000 depending on income level and energy savings achieved, HOMES takes a fundamentally different approach from the tax credit programs under Sections 25C and 25D. Instead of crediting individual equipment purchases, HOMES rewards measurable energy savings across the entire home — encouraging homeowners and contractors to think holistically about energy performance.

How HOMES Works: The Whole-Home Approach

The central philosophy behind HOMES is that the biggest energy savings come from treating the house as a complete system rather than addressing individual components in isolation. A new heat pump installed in a poorly insulated home with leaky ductwork will underperform compared to the same heat pump in a well-sealed, properly insulated structure. HOMES incentivizes the comprehensive approach by tying rebate amounts to the percentage of energy savings your improvements deliver across the entire home.

The program offers two distinct pathways for calculating those energy savings, giving homeowners flexibility in how they demonstrate their improvements qualify.

Pathway 1: The Modeled Approach

Under the modeled pathway, a qualified contractor uses approved energy modeling software to estimate the energy savings that a set of proposed improvements will deliver. The model compares the home's current energy performance against its projected performance after the improvements are completed. This pathway is ideal for homeowners planning a defined set of upgrades because it provides a rebate determination before the work begins.

To qualify through the modeled approach, the projected energy savings must meet minimum thresholds:

• 20% or more reduction in energy use: Rebate of up to $2,000 (standard income) or $4,000 (low/moderate income)
• 35% or more reduction in energy use: Rebate of up to $4,000 (standard income) or $8,000 (low/moderate income)

The modeling must be performed by a contractor certified under the program, using DOE-approved software tools. This ensures consistency and accuracy across all applications.

Pathway 2: The Measured Approach

The measured pathway bases the rebate on actual energy savings documented through utility bill data after the improvements are installed. This approach appeals to homeowners who prefer to demonstrate real-world results rather than relying on software projections. The measured pathway uses the same savings thresholds — 20% and 35% — but compares actual pre-improvement and post-improvement energy consumption over a defined period.

While the measured approach may take longer to complete (because it requires post-improvement energy data), it can sometimes yield better results for homes where modeling software may not fully capture the unique characteristics of the building. The measured pathway also allows homeowners to include behavioral changes and operational improvements that models might not account for.

Rebate Amounts and Income Thresholds

HOMES uses Area Median Income (AMI) to determine whether a household qualifies for standard or enhanced rebate levels:

Standard Income Households (above 80% AMI)

• 20%+ energy savings: Up to $2,000 rebate (not to exceed 50% of project cost)
• 35%+ energy savings: Up to $4,000 rebate (not to exceed 50% of project cost)

Low and Moderate Income Households (at or below 80% AMI)

• 20%+ energy savings: Up to $4,000 rebate (not to exceed 80% of project cost)
• 35%+ energy savings: Up to $8,000 rebate (not to exceed 80% of project cost)

The 80% AMI threshold varies significantly by location. In a high-cost metropolitan area, 80% AMI for a family of four might be $80,000 or more, while in a rural area it could be $45,000. The Department of Housing and Urban Development (HUD) publishes AMI figures annually for every county in the United States. Your state energy office or program administrator can help you determine whether your household income falls below the threshold for your area.

Eligible Upgrades

Because HOMES is performance-based rather than equipment-based, virtually any improvement that contributes to measurable whole-home energy savings can qualify. Common eligible upgrades include:

• Insulation — attic, wall, floor, and basement insulation upgrades
• Air sealing — eliminating drafts and reducing uncontrolled air infiltration
• HVAC systems — heat pumps, high-efficiency furnaces, central air conditioning
• Ductwork — sealing, insulating, or replacing leaky duct systems
• Windows and doors — replacing single-pane or deteriorated units with high-performance alternatives
• Water heating — heat pump water heaters or high-efficiency gas units
• Smart thermostats and controls — when included as part of a comprehensive improvement package

Reputable contractors like those in the Building Performance Institute (BPI) network specialize in the whole-home assessment approach that HOMES requires.

Contractor Requirements

HOMES places significant emphasis on contractor quality. All work must be performed by contractors who meet the program's certification requirements, which are established by each state's energy office based on DOE guidelines. At minimum, contractors must demonstrate:

• Certification through BPI, RESNET, or an equivalent recognized body
• Proficiency with DOE-approved energy modeling software (for the modeled pathway)
• Compliance with all applicable building codes and safety standards
• Proper licensing and insurance as required by the state

States may establish additional contractor training requirements as part of their program implementation. Using a non-certified contractor will disqualify your project from receiving HOMES rebates.

State-by-State Rollout Status

Unlike federal tax credits that are available nationwide from day one, HOMES is administered by individual states, which means the launch timeline varies. The DOE allocated approximately $4.3 billion in total HOMES funding across all states and territories. Each state must submit an implementation plan to the DOE and receive approval before launching its program. As of early 2026, the majority of states have received their funding allocations and many have active programs, but some states are still in the planning or early implementation phases. Check your specific state page on Rebate Atlas for the most current program status and application instructions in your area.

How to Apply

The application process for HOMES generally follows these steps, though specific procedures vary by state:

1. Contact your state energy office or the designated program administrator to confirm the program is active and accepting applications in your area.
2. Schedule a home energy assessment with a certified contractor who can evaluate your home's current energy performance and recommend improvements.
3. Choose your pathway — modeled or measured — and work with your contractor to develop a scope of work that meets the minimum energy savings thresholds.
4. Submit your application through the state's designated portal, including the energy model or baseline energy data.
5. Complete the improvements using a certified contractor.
6. Receive your rebate — depending on the state, this may be applied at point of sale, issued as a direct payment, or processed as a reimbursement after project completion.

HOMES and HEAR: Understanding the Relationship

The Inflation Reduction Act created two distinct rebate programs — HOMES and HEAR (High-Efficiency Electric Home Rebate Act). While both programs can benefit the same household, you cannot use both HOMES and HEAR for the same individual upgrade. For example, if you receive a HEAR rebate for a heat pump, you cannot also count that heat pump toward your HOMES energy savings calculation for rebate purposes. However, you can use HEAR for specific equipment purchases and HOMES for other whole-home improvements, maximizing your total benefit across both programs.

The HOMES Rebate Program represents a significant shift in how the federal government incentivizes residential energy efficiency. By focusing on measurable whole-home performance rather than individual product purchases, HOMES encourages the comprehensive approach that energy experts agree delivers the greatest long-term savings. With rebates up to $8,000 for qualifying low-income households and a flexible dual-pathway structure, the program is designed to make deep energy retrofits accessible to millions of American homeowners.