Green Building Law Update Service

Center for Climate Change Law

On April 21, 2011, the Departments of Energy and Housing and Urban Development announced the launch of the PowerSaver program, a two-year pilot program that will offer qualified borrowers low-cost loans to make energy-saving improvements to their homes.

The program will offer loans of up to $25,000 backed by the Federal Housing Administration for energy efficiency improvements that include the installation of insulation, duct sealing, replacement doors and windows, heating and air-conditioning systems, water heaters, solar panels, and geothermal systems.  Interest rates on the loans are expected to be between 5-7 percent and the repayment term can go up to 20 years.  FHA encourages consumers to utilize an energy audit to determine the most cost effective improvements for their home.

Borrowers must have credit scores of at least 660 and their total debt to income ratios cannot exceed 45 percent. The combined loan-to-value ratio for all loans on a home, including the PowerSaver loan, cannot exceed 100 percent.  HUD has approved 18 lenders for the program.

The program is part of the Recovery Through Retrofit initiative announced by the White House in November 2010.  This initiative seeks to make homes more energy-efficient and includes a voluntary home energy scoring program developed by the Department of Energy.

Additional information about the PowerSaver program is available here.

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