PowerSaver Finance for Green Improvements

The Federal Housing Authority and Fannie May have launched a pilot program to finance energy efficient systems for homeowners.  With available fixed rates between 5-7% for up to 20 years and a $25,000 maximum, borrowers can qualify for loans for high-efficiency improvements.  Windows and doors, heating and ventilation systems, solar panels, geothermal systems, insulation and duct sealing, among other retrofits are among approved PowerSaver items.  So far, only eighteen lenders around the country have signed on to participate in this program.

To qualify, borrowers must meet the following guidelines:

1.  The property must be the principal residence – detached single family home. No rentals, no investor homes, no second homes.

2.  Borrowers must have a minimum FICO score of 660 with a debt-to-income ratio not to exceed 45%.

3.  Home equity including the PowerSaver second lien, cannot exceed 100% of the appraised value.  Fannie Mae borrowers are required to pay for an upfront audit by a Home Energy Rating System expert with the total cost of the improvements being folded into the existing borrower’s mortgage.  Homes with negative equity do not qualify.

Such improvements will enable homeowners to enjoy such benefits as fewer drafts, consistent temperatures across rooms, better ventilation and humidity control, and lower utility bills.
Housing and Urban Development estimates that within the next two years 30,000 such loans will have been approved.

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