Capital Improvement Policy

The credit amount is 80% of the owner’s actual costs. Some credits go down in value over time (depreciate) and some do not.

Only costs paid by the owner are allowed; this can include materials and/or labor. No credit for labor is given if the owner does the work themselves. The cost of tools is not included (saw, hammer, etc.). Money or discounts from others is not included (grants, tax credits, etc.).

Paid receipts and invoices are required to get credit. Some things require a building permit. Final building department inspections need to be passed before a credit can be given.

Owners must have their improvements approved before the work starts. This allows the program to review the proposed work, and the program will let owners know how much credit they will receive. Request pre-approval using the Capital Improvement Request form.

If pre-approval is not requested, a partial credit may still be available. The amount of this credit is 40% of costs (half a regular credit).

In emergencies, credit can be given even if it is not pre-approved. For example, a furnace dies on a Friday and needs to be replaced quickly. An 80% credit can still be given. The owner needs to send a paid receipt and final inspection within 30 days of the work being finished.

1. Improvements that add livable space to the home. Finished basements must have at least one egress window. Work must comply with the local building code.

2. New cooling system or replacing a ten+ year old system. This can include whole house fans, ceiling fans, evaporative coolers, heat pumps, or central air conditioning (AC). To qualify the system must meet the standards to get an EnergySmart rebate. Alternatively, for an AC, the SEER rating needs to be 15 or higher.

3. Replacing carpet or vinyl floors that are more than 10 years old. The floor needs to be replaced with:
   • Hardwood floors (solid or engineered, including cork and bamboo).
   • Luxury Vinyl Plank flooring. The wear layer needs to be 20 mil or higher or have an Abrasion Class of 4 or higher. The material needs to be waterproof and have a rigid core.

   • Ceramic tile.

     Replacing with new carpet or vinyl is not eligible.

4. Radon gas mitigation systems. To be eligible the home needs to test above EPA set thresholds. Radon testing costs are not eligible, only mitigation system costs. A qualified contractor needs to be used.

5. New perimeter fencing around the yard.

6. Added wall, ceiling or crawlspace insulation.

7. New solar systems purchased by the owner (photovoltaic or thermal). Lease or buyback programs cannot get credit.

8. New electric car charging outlets (level 1 or level 2).

9. New Energy Star rated appliances. A flat credit of $100 is added. Not the actual cost of the appliance. The appliance needs to stay with the home when sold.

10. Replacing a furnace or boiler that is more than 10 years old. To qualify the new system must meet the standards to get an EnergySmart rebate. Alternatively, furnaces with an Annual Fuel Utilization Efficiency (AFUE) of 95% or higher qualify. Boilers with an AFUE of 90% or higher qualify.

11. Replacing a water heater that is more than 10 years old. To qualify the new water heater must meet the standards to get an EnergySmart rebate. Alternatively, water heaters with an Energy Factor rating of 0.67 or higher qualify.

12. Renovation of a kitchen or bathroom that is 20 or more years old. Credit depreciates over time.

13. Replacement of single pane or defective windows (any age). Replacement of double pane windows that are more than 20 years old. The new windows need to be double or triple paned. Credit depreciates over time.

Most owners cannot add more than $30,000 in credit to the home’s value. This resets with each new owner.

Homes that are more than 20 years old are allowed more credit. People who have owned the home for more than 15 years are also allowed more credit. The credit limit in these cases is raised by $20,000 ($50,000 total).

A very small number of homes bought before 2008 have a different credit limit. Owners who think they may have a different limit may contact the program.

There is also a City of Boulder program that has no limit - Middle Income Down Payment Assistance Program has no cap. Credit is only available for the items listed above.

Program staff may need to visit the home after the work is completed to confirm the work meets the program standard. If it does not meet the standard the credit amount may be adjusted.

• Non-permanent or cosmetic work cannot get credit.
• Luxury and high-end items will only get credit based on the cost of standard grade items.
• Credit is not given after an Intent to Sell Form has been turned in. Improvements made after this and before closing cannot get credit.
• It may be necessary to get a permit for the work. The owner needs to contact the local building department for permit information. The program does not approve permits.