As housing affordability and availability continue to dominate national conversations, Alaska is taking direct action to increase its housing supply. In the recently approved 2025 capital budget, Governor Mike Dunleavy and the Alaska Legislature earmarked $7 million for a New Home Construction Rebate, a program to be administered by the Alaska Housing Finance Corporation (AHFC).

Aimed at increasing the number of new homes statewide, the rebate program is expected to support the construction of approximately 650 energy-efficient homes. Eligible participants who build a single-family home or up to a four-plex and meet energy efficiency standards can receive a $10,000 rebate upon completion of the build and submission of the required documentation, including proof of a 5-Star Plus or higher energy rating.

“This rebate specifically targets the undersupply of new homes throughout Alaska and is a significant step aimed at jumpstarting new construction statewide,” said Bryan Butcher, CEO and executive director of AHFC. “This is a terrific opportunity to upgrade new inventory with innovative designs while simultaneously increasing the availability of more energy efficient homes.”

The program builds on a similar consumer rebate initiative AHFC managed between 2008 and 2016, during which more than 3,600 energy-efficient homes were constructed across Alaska.

High Demand Meets Aging Supply

Demand for housing in Alaska remains high, with supply shortages and aging infrastructure presenting ongoing challenges. In Anchorage, over half the housing stock dates back to the 1970s and 1980s. In smaller and rural communities, the condition of housing is often worse, with many units outdated or in disrepair.

High construction and labor costs, coupled with supply chain delays and limited land availability, further complicate the ability to build or renovate homes at scale.

A Streamlined Application Process

AHFC is working to ensure the rebate process is accessible and efficient. The online application, available at AlaskaHousingEnergy.us, is designed to be user-friendly. Once all required documents are submitted, AHFC anticipates a 30-day review period for processing.

To qualify, construction must begin on or after January 2, 2025, and the project must meet the 5-Star Plus or higher energy standard. Applicants have 18 months to complete the home and submit final documentation. Importantly, one of the units must be occupied by the homeowner as their primary residence to be eligible.

Participants will receive a 1099-G tax form for the rebate and are advised to consult a tax professional regarding any tax implications.

Revitalizing Alaska’s Housing Landscape

As Alaska looks to the future, the New Home Construction Rebate represents a key investment in both housing supply and energy efficiency. The program also supports the state’s broader energy initiatives and reflects AHFC’s ongoing commitment to making housing more accessible and sustainable for Alaskans.

To learn more about the program, sign up for updates, or begin an application, visit ahfc.us/efficiency.

Originally reported by Community Headlines, Home Ownership in Alaska Housing.