Vermont Energy Investment Corporation (VEIC) joined its Delaware partners at a ribbon-cutting ceremony today to launch a pilot program to transform the housing options for Delaware’s low-income homebuyers.

The Delaware Sustainable Energy Utility (DESEU) commissioned VEIC to assess the feasibility of developing Zero Energy Modular homes as an alternative to mobile and manufactured homes in Delaware.

The assessment was structured in two phases.

• Phase 1 evaluated the market potential for a program to replace mobile and manufactured homes with zero energy modular homes in Delaware. The study, Market Analysis for Zero Net Energy Manufactured Home Replacements in Delaware (January 2015), determined that there is sufficient market to create a zero energy modular home pilot program, and a sufficient market in the long-term to justify the costs of a pilot program.
• Phase 2 involved engagement with affordable housing stakeholders to get feedback and ideas on program design and partnerships including financing sources for a pilot project, with the objective of sustainable funding and financing for long-term market development. VEIC cultivated a relationship with a qualified modular home-building company to bring this concept to fruition. Phase 2 also evaluated costs and identified appropriate incentive levels, performance metrics and savings verification.

The pilot program team chose ZeMod Delaware as the name of the program, and the homes are being called ZeMods. The three-year pilot program aims to develop 25 ZeMod homes. Additional market-rate buyers are expected to emerge as the public gains awareness and the concept achieves market acceptance.

The ZeMod pilot program relies on strong partnerships. Milford Housing is the Pilot Program Manager and handles day-to-day program management and provides a seamless customer experience to home buyers. Diamond State Community Land Trust and Delaware’s three Habitat for Humanity chapters will generate mortgage-ready buyers seeking this type of home. Beracah Homes is building the modular units to the US Department of Energy Zero Energy Ready Home standard at their Greenwood factory. VEIC provides ongoing program implementation support and technical guidance and assistance.

The pilot program leverages Delaware’s existing home buyer counseling agencies to refer home buyers who are “mortgage ready” and have access to private and public mortgage capital to purchase the units. The DESEU will provide incentives to buy down the incremental cost of the units and funding for down payment assistance loans to make the units affordable to low income buyers.

DESEU’s ZeMod program is rooted in a Vermont success story that emerged in the wake of Tropical Storm Irene in 2011. Flooding caused by Irene destroyed hundreds of manufactured homes, highlighting the need for more resilient low income housing options in rural communities. VEIC was part of a team that developed high-efficiency modular homes as energy efficient, durable replacements for manufactured homes. Based on that experience, VEIC has developed a program to substitute mobile or manufactured homes with zero energy modular units. View this short video for an overview of VEIC’s work on Zero Energy Modular Homes.

With installed solar PV, the homes are net zero in energy use, even in harsh winter climates. Most important, the homes have high quality indoor air, and can be financed as real property, allowing families to build equity and wealth through homeownership.

“VEIC’s expertise in low income program design, net zero energy and tackling challenging but impactful projects made them the best partner for the project,” said DESEU Executive Director Tony DePrima. “We look forward to working with them again as we begin the implementation of the pilot.”

The need for affordable housing is as acute in Delaware as any other part of the United States. Housing affordability must include energy affordability, and for many Delawareans who have purchased mobile or manufactured homes, the benefits of low upfront purchase costs are often eclipsed by the high energy costs and inferior indoor air quality for decades. Unlike a manufactured home, a modular home often retains its value over time. The pilot program will provide benefits to a market segment that currently has few housing options for long term durability and affordability.