DOE and HUD Kick Off Energy Efficiency Loan Program
PowerSaver loans, backed by the Federal Housing Administration, will be available from 18 lenders in certain regions of the country to provide homeowners up to $25,000 to make energy-efficient improvements, including door and window replacement. A two-year pilot program was kicked off last week by the Department of Housing and Urban Development and the Department of Energy.
"We believe the market is right for a low-cost financing option for families who want energy-saving technologies in their home," said HUD Secretary Shaun Donovan, during a tour of a Long Island, N.Y.-company that offers home energy audits and upgrades, where the announcement was made last week. "PowerSaver hits on all cylinders by helping credit-worthy homeowners finance these upgrades, cut their energy bills and boost the local job market in the process. While FHA and these lenders are jumpstarting this pilot, we hope its success will lead to a growing private sector interest in making these types of loans."
"Today, we are breaking down barriers and making energy efficiency more accessible and more affordable," added Energy Secretary Steven Chu, who was also on hand for the event. "It’s the right thing to do for our environment, for our economy, and for the pocketbooks of American families."
The program is being rolled out in areas of the country participating in the Energy Department’s Better Buildings Program. Initially, the PowerSaver pilot program is expected to assist approximately 30,000 homeowners to finance energy-efficient upgrades, though higher market demand may increase this impact. According to HUD projections, more than 3,000 jobs will be created through this pilot program and the impact may be larger if market demand for the loan program increases over time.
Participating lenders in the pilot program have been selected primarily based on their commitment to work in partnership with established home energy retrofit programs provided by states, cities, utilities, and home performance contractors. FHA PowerSaver approved lenders include Admirals Bank; AFC First Financial Corp.; Bank of Colorado; City of Boise, Idaho; Energy Finance Solutions; Enterprise Cascadia; HomeStreet Bank; Neighbor's Financial Corp.; Paramount Equity Mortgage Inc.; Quicken Loans; SOFCU Community Credit Union; Stonegate Mortgage Corp.; Sun West Mortgage Company Inc.; The Bank at Broadmoor; University of Virginia Community Credit Union Inc.; Viewtech Financial Services Inc.; WinTrust Mortgage; and W. J. Bradley Mortgage Capital Corp.
PowerSaver loans will be backed by the FHA but require these lenders to have significant "skin in the game," FHA officials note. FHA mortgage insurance will cover up to 90 percent of the loan amount in the event of default, with lenders retain the remaining risk on each loan to incentivize responsible underwriting and lending standards.