Federally-Backed Loans for Major Energy Efficiency Upgrades? Believe It

Many homeowners looking to lower their utility bills may try to seek a cheaper electricity supplier, if they live in a state that has deregulated its energy market.  Others may be looking into home improvement projects that will improve the energy efficiency of their homes.  For folks looking into more ambitious home improvement projects, the federal government has launched a pilot program that can help offset some of the costs.

Last November, the U.S. Department of Housing and Urban Development announced the PowerSaver loan program, which offers low-interest loans to qualified homeowners looking to do energy efficiency retrofit projects.

Understand, these aren’t for cheaper upgrades like getting newer refrigerators, much less swapping out incandescent bulbs for CFLs.  This program is restricted to big-ticket upgrades such as high-efficiency HVAC systems, solar panels, geothermal heating or cooling systems and tankless water heaters.

According to one analyst, Federally-backed PowerSaver loans, available for up to $25,000 through an array of approved lenders, have a number of requirements for borrowers, but likely nothing beyond what would be required for a normal home equity loan.  Homeowners would likely have to have a credit score of at least 660 and a mortgage balance less
than 45% of their annual income.

If you’re interested, you should probably move quickly.  The program is restricted to around 30,000 homeowners and lasts two years.

Ryan Boots is a writer and web professional based in Houston, Texas.

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