Mechanical ventilation systems in residences usually serve a single purpose, providing only a relatively small benefit compared to the capital cost. Polluted areas use mechanical ventilation to filter incoming air, cold regions use it to be able to recover the heat from the stale air going out. However, both issues - energy and air-quality - can be beneficially addressed together using one ventilation system in cold climate regions with air pollution problems, such as Fairbanks, Alaska. This paper presents a dynamic model for evaluating indoor PM2.5 levels and energy consumption associated with ventilation. The model was verified by comparing the model-predicted real-time indoor PM2.5 level with the actual level measured in a Fairbanks home and a good agreement (r = 0.95) was found. Then, the model was used to study three ventilation scenarios of a typical home in Fairbanks-natural ventilation, using an HRV, and using an HRV with an additional particulate filter. The external cost associated with breathing the indoor PM2.5 was also evaluated. The scenario with an HRV and an additional filter was shown to have about $380 lower annual energy cost than the scenario with natural ventilation and the saving in the PM2.5 associated external cost was about $690 annually. The savings were shown to exceed the operational costs of the ventilation system.