HUD to Pilot New PowerSaver Loan Program

November 23rd, 2010 - Posted by RESNET under Home Builders, Hot Topics, Job Opportunities, Legislation

The U.S. Department of Housing and Urban Development announced a new pilot program that will offer credit-worthy borrowers low cost loans to make energy saving improvements to their homes.

Backed by the Federal Housing Administration, the new “PowerSaver” loans will offer homeowners up to $25,000 to make energy-efficient improvements of their choice, including the installation of insulation, duct sealing, doors and windows, HVAC systems, water heaters, solar panels, and geothermal systems.

According to industry forecasts, more homeowners are interested in making their homes energy efficient. Yet options are still limited for financing home energy improvements, especially for the many homeowners who are unable to take out a home equity loan or access an affordable consumer loan. HUD has  published a notice seeking the participation of a limited number of mortgage lenders in the two-year pilot program slated to begin in early 2011.

“HUD and FHA are committed to lowering the cost and expanding the availability of affordable financing for home energy retrofits,” said Secretary Donovan. “PowerSaver will help more homeowners afford common sense, cost saving improvements to their homes, and will create jobs for contractors, installers and energy auditors across the country.”

“PowerSaver provides lenders with a new product option to serve a potentially growing market,” said David H. Stevens, FHA Commissioner. “We believe there are a number of lenders who will be interested in working with us to help save energy and money for homeowners, while creating jobs and cutting greenhouse gas emissions”

Lenders will be selected to participate in the program based on their capacity and commitment to provide affordable home energy improvement financing.  According to HUD, the loans will be backed by FHA up to 90 percent of the loan amount in the event of default.  Lenders will retain the remaining risk on each loan.  FHA will provide streamlined insurance claims payment procedures on PowerSaver loans. In addition, lenders may be eligible for incentive grant payments from FHA to enhance benefits to borrowers, such as lowering interest rates.

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  • David Armentrout

    Where can I find details and contacts fr this program?

  • Les Hamasaki

    Will the homeowners able to take the federal tax credit of 30% plus the rebates and incentives?
    For example a $25,000 loan, the tax credit would be $7,500 and the out of pocket cost would be $17,500, if you have a tax liability.
    Also, would this be a second mortgage or will it be part of the PACE (Property Accessed Clean Energy Fund) program that appears on the property tax bill?

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