The new Power Saver program from the FHA is a pilot project designed to provide two great benefits. It will offer the financing necessary to implement energy saving improvements for homes in the U.S. And it will also provide the mortgage insurance on the loans that homeowners need to become more energy efficient.
The new Power Saver program can offer as much as $25,000 in financing with interest rates between 5-7% and a term of up to 20 years. The real benefit is that the FHA will provide mortgage insurance to the lender, who may cover as much as 90% of the loan in case of default. The financing is contingent on a list of established improvements developed by the FHA and the U.S. Department of Energy (DOE). These improvements include:
Eligible Efficiency Improvements
- Energy efficient HVAC systems
- Duct sealing
- Insulation
- Energy efficient doors and windows
- Water heaters
Eligible Renewable Energy Improvements
As with most programs, an energy audit is recommended to establish a justifiable strategy to meet the particular circumstances of each building.
Statistics show that homeowners in the U.S. are becoming more interested in increasing the efficiency of their homes. However, financing options have been scarce after the economic meltdown. This new program is designed to help qualified homeowners. To be considered, homeowners must have the resources to make their payments and a credit score of at least 660. They must also fulfill two additional requirements. The debt-to-income ratio of the applicant cannot exceed 45% and the loan-to-value ratio on the home cannot exceed 100%. If the application is accepted, it is important to keep in mind that this loan will be considered an additional mortgage on the home. It will be secured by the deed and subordinate to any other existing mortgages. For more information on this program visit HUD
