Innovative Housing Incentive Program

The Innovative Housing Incentive Program (IHIP) is a state-funded initiative established by Colorado House Bill 22-1282 in 2022, designed to address Colorado's shortage of affordable and attainable housing by supporting innovative housing manufacturers. Managed by the Colorado Office of Economic Development and International Trade (OEDIT), the program provides financial assistance through three distinct mechanisms: an operating expense reimbursement grant, a per-unit cash incentive, and a factory loan. The program was initially funded with $40 million in state dollars and does not have a sunset date. Its primary goal is to stimulate the production of prefabricated residential units that incorporate innovative technologies and contribute to the state's housing affordability and sustainability goals. Eligible applicants for the program include Colorado-based housing manufacturers with fewer than 500 employees who produce modular, panelized, 3D-printed, kit, or tiny homes intended for permanent installation. All units must be prefabricated in off-site facilities that reduce on-site labor and time. Companies must have produced at least one prototype in a Colorado facility to qualify, and early-stage businesses with five or fewer employees have a dedicated funding allocation of $3 million for the program’s first five years. Additional eligibility requirements apply to the working capital grant, including disqualifying subsidiaries of larger parent companies. IHIP’s operating expense reimbursement grant covers up to 20% of eligible operating costs—such as payroll, materials, and utilities—incurred during the grant term, with a maximum lifetime award of $350,000 per business, or $450,000 for those in Tier 1 Just Transition counties. Grants are distributed on a monthly reimbursement basis over a three-year contract term, with up to 50% of the total reimbursed in any single year. An additional $50,000 affordability bonus is available for businesses that dedicate at least 10% of their production to deed-restricted affordable housing. The per-unit incentive rewards businesses with $1,500–$6,000 per unit installed in Colorado, based on affordability, sustainability, and density metrics. Base incentives start at $1,500, with additional bonuses of up to $2,000 for meeting affordability or sustainability benchmarks, and an additional $500 for density. Units must be constructed post-award and verified through supporting documents such as building plans, invoices, and certificates of occupancy. Reimbursements are processed monthly, with a maximum of 150 units eligible per business each year. The lifetime cap for the per-unit incentive is $1 million. The factory loan program, originally part of IHIP, was combined with Proposition 123’s Factory Loan initiative and is now administered by the Colorado Housing and Finance Authority (CHFA). Loans of up to $10 million are available to finance the construction or expansion of innovative housing facilities in Colorado. Loans are low-interest, must be repaid, and are designed to be reinvested into future manufacturing ventures. Importantly, a single business may access both a loan and a grant, provided each supports different facilities. Applications for the IHIP grants are accepted on a rolling basis. The process begins with a screener survey, followed by a full application and an in-person facility visit. Approved applicants enter a multi-year contract with OEDIT and submit monthly documentation for reimbursement. Evaluation is conducted by an interagency panel comprising representatives from OEDIT, the Division of Housing, the Colorado Energy Office, the Governor’s Office, and CHFA. Program guidelines are subject to revision and updates are communicated through the IHIP newsletter and CHFA eNews. The most recent updates occurred in January 2026, with the second round of the factory loan program awards announced that same month.