Last updated: April 11, 2026
For clients above 150% of Area Median Income (AMI), 2026 is a meaningfully harder year. They never qualified for HEAR. And as of January 1, 2026, they lost the 25C tax credit — their primary federal incentive for heat pump HVAC, water heaters, insulation, and windows.
This guide covers what's still available: the HOMES rebate, state utility programs, and financing tools that close the gap for clients the federal rebate stack doesn't reach.
HEAR (Home Electrification and Appliance Rebates) is income-limited: households must be at or below 150% of AMI to qualify. In practice, this is a wide swath of clients in affluent metros:
| Metro Area | 150% AMI (family of 4) | Implication |
|---|---|---|
| Boston, MA | ~$170,000 | Many middle-class households qualify for HEAR |
| New York City, NY | ~$175,000 | Wide HEAR eligibility in outer boroughs, less in Manhattan |
| Washington, DC | ~$185,000 | Generous AMI — most DC-area households qualify |
| Denver, CO | ~$150,000 | Many suburban households still qualify |
| Atlanta, GA | ~$130,000 | Above-AMI clients more common in affluent suburbs |
| Indianapolis, IN | ~$115,000 | More households fall above 150% AMI threshold |
| Rural/lower-cost counties | $80,000–$100,000 | Many clients above threshold — check HUD AMI lookup |
In lower-cost counties where 150% AMI is $85,000–$100,000, a significant portion of homeowners — especially those who own their homes and can afford upgrades — won't qualify for HEAR. For practitioners in suburban or rural markets, above-AMI clients may be the majority of their work.
| Program | Amount | Status | Income Limit? |
|---|---|---|---|
| HOMES rebate (Section 50121) | Up to $4,000 | Conditional | No — but lower amounts above 80% AMI. Requires ≥20% whole-home savings. |
| State utility rebates | Varies by program | Available | No income limit for standard programs |
| PACE financing | Full project cost possible | Available | No (property-based, not income-based) |
| State green lending programs | Up to $25,000–$50,000 | Varies by state | No income limit for most programs |
| 25C tax credit | Up to $3,200/year | Expired 12/31/25 | N/A — expired under OBBBA |
| HEAR rebate | Up to $14,000 | Income limit | ≤150% AMI required — not available above threshold |
HOMES (Home Efficiency Rebates, Section 50121) does not have an upper income limit. Any household in a live HOMES state can receive HOMES rebates — though the amounts are lower for market-rate (above 80% AMI) households than for LMI households.
| Savings Level | LMI Household (≤80% AMI) | Market-Rate (above 80% AMI) |
|---|---|---|
| 20–35% whole-home savings | Up to $4,000 (up to 80% of cost) | Up to $2,000 (up to 50% of cost) |
| 35%+ whole-home savings | Up to $8,000 (up to 80% of cost) | Up to $4,000 (up to 50% of cost) |
For above-AMI clients, $2,000–$4,000 is not nothing — especially on a $15,000–$25,000 comprehensive upgrade project. The challenge: HOMES requires whole-home savings documentation. A heat pump replacement alone often won't hit 20% savings. A comprehensive project — heat pump + insulation + air sealing + water heater — usually does.
Scenario: $18,000 project — heat pump HVAC ($10K) + air sealing/insulation ($5K) + heat pump water heater ($3K). Modeled savings: 38% whole-home energy reduction. Household income: $145,000 (above 150% AMI in their county).
Before OBBBA, this client would have added 25C at ~$2,700 (30% × $9,000 net cost) → $8,700 total savings. The 25C expiration costs this household $2,700.
HOMES is administered state-by-state. Check current program availability — several states have prioritized LMI households first and are phasing in market-rate enrollment. See the HOMES rebate program guide →
Most utility rebate programs have no income requirement. They're funded by utility ratepayers and administered by utilities or third-party program administrators. These are often the most immediately accessible option for above-AMI clients.
| State / Program | Heat Pump HVAC Rebate | Heat Pump WH Rebate | Notes |
|---|---|---|---|
| Massachusetts — Mass Save (Eversource/National Grid) | Up to $2,500 | Up to $750 | Income-agnostic standard tier; enhanced rebates for income-eligible |
| New York — ConEd Clean Heat | $500–$1,500/system | — | NYC and Westchester; NYSERDA programs available statewide |
| Illinois — ComEd/Nicor Energy Efficiency | Up to $1,500 | Up to $500 | Income-agnostic; requires minimum efficiency |
| Wisconsin — Focus on Energy | Up to $600 | Up to $300 | Statewide; available to all WE Energies, Alliant, WPS customers |
| New Jersey — PSE&G / JCP&L Smart Homes | Up to $1,500 | Up to $500 | Check specific utility; programs vary by provider |
| Michigan — DTE / Consumers Energy | Up to $1,000 | Up to $400 | DTE: $1,000 for qualifying cold-climate heat pump; Consumers: similar |
| Washington — PSE / Avista | Up to $1,500 | Up to $500 | PSE offers enhanced rebates for cold-climate units; stacks with HEAR |
| California — SoCalGas / SCE / PG&E | Varies | Up to $600 | Check TECH Clean California; varies by utility territory |
| Colorado — Xcel Energy / Black Hills | Up to $1,500 | Up to $500 | Xcel offers rebates for air-source heat pump; stacks with HEAR for eligible households |
| Maryland — BGE / Pepco / Delmarva | Up to $1,500 | Up to $400 | Check EmPOWER Maryland; income-agnostic standard tier |
The key practitioner action: for every above-AMI client, look up their utility provider and check the current rebate schedule before the proposal stage. Utility rebates often expire or change amounts mid-year. The stacking guide → covers application sequencing and the gross-vs-net cost issue.
PACE (Property Assessed Clean Energy) is property-secured financing repaid through the property tax bill. It's the leading financing option for above-AMI clients who don't want to tap home equity or personal credit.
How it works:
Where it's available: Commercial PACE is available in 40+ states. Residential PACE programs are more restricted:
Several states operate their own below-market lending programs for home energy upgrades. These are often the best financing option where available:
| State | Program | Terms | Income Limit? |
|---|---|---|---|
| Massachusetts | MassSave HEAT Loan (Mass Clean Energy Center) | 0% APR for income-eligible; market rate for others; up to $25,000; 7 year term | 0% rate for ≤120% AMI; market rate for others — no income cutoff |
| Michigan | Michigan Saves Home Energy Loan | Competitive rates from 5.99%; up to $30,000; 5–15 year terms | No income limit; stacks with DTE/Consumers rebates |
| Connecticut | CT Green Bank Smart-E Loan | 3.49–6.99% APR; up to $40,000; 5–15 year terms | No income limit; available statewide through participating lenders |
| New York | NYSERDA Green Jobs Green NY Loan | Starting at 3.49%; up to $25,000; 5–15 years | No income limit; income-eligible households may receive additional incentives |
| Maryland | Maryland Clean Energy Center CleanEnergy Loan | 7.49–8.99%; up to $20,000; 7–15 year terms | No income limit |
| Wisconsin | Focus on Energy On-Bill Financing | 0–1.99%; up to $30,000; utility bill repayment | Low-income priority but available to all utility customers |
State program terms change. Verify current rates and availability directly with the administering agency before quoting clients.
For clients refinancing, purchasing, or doing major renovations, mortgage-linked energy financing can be the most cost-effective option:
Allows borrowers to add up to 15% of the "as-completed" appraised value to a purchase or refinance mortgage for energy and water efficiency improvements. Heat pumps, insulation, windows, and solar all qualify. Processed as a standard mortgage — rates reflect the prevailing mortgage rate, not a specialty loan premium. Requires a contractor bid and independent verification.
Allows FHA borrowers to add up to 5% of the property value (up to the maximum FHA loan limit) for energy improvements on top of an FHA purchase or refinance loan. Requires an energy audit by a qualified assessor. The energy savings must be cost-effective (documented payback period).
For clients who want simple financing without collateral:
Above-AMI clients who hear "the tax credit is gone" may assume there's nothing left. The practitioner's job is to frame what remains accurately — not to oversell, but not to abandon the conversation either.
"The 25C federal tax credit ended December 31st — that was $2,000–$3,200 off your federal taxes, and it's gone for now. But here's what's still on the table for your project: [utility rebate program] offers $[X] for the heat pump with no income requirement. And if the project hits 20% or more whole-home savings, you may qualify for HOMES rebates of up to $[2,000 or $4,000]. Add those together and you're at $[total] in direct incentives, separate from the energy savings you'll see on your bills.
"If you want to think about financing for the balance, I can walk you through [PACE / state green loan / contractor financing options]. The project math still works — it just takes a few more conversations."
Three questions to resolve in the above-AMI client conversation:
For above-AMI clients who relied on 25C as part of their payback calculation, the math changes by $2,000–$3,200. Here's how to reframe:
| Project: $15,000 heat pump HVAC + $3,000 insulation, MA above-AMI household | Pre-OBBBA (2025) | Post-OBBBA (2026) |
|---|---|---|
| Utility rebate (Mass Save) | $2,000 | $2,000 |
| HOMES rebate (est. 28% savings) | $2,000 | $2,000 |
| 25C tax credit | $2,160 (30% × $7,200 net) | — |
| Total incentives | $6,160 | $4,000 |
| Net out-of-pocket | $11,840 | $14,000 |
| Est. annual energy savings | $1,100 | $1,100 |
| Simple payback | 10.8 years | 12.7 years |
The payback extends roughly 2 years. For clients considering this on comfort, reliability, and decarbonization grounds — not purely financial — the 25C loss doesn't change the decision. For purely financial buyers, the loss is real and worth acknowledging directly.
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