Federally Subsidized Energy Efficiency Loans Piloted At CUs, Banks
WASHINGTON – Two credit unions will participate in a new, two-year pilot program that will offer qualified borrowers living in certain parts of the country low-cost loans to make energy-saving improvements to their homes.
Backed by the Federal Housing Administration, these 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, replacement doors and windows, HVAC systems, water heaters, solar panels, and geothermal systems.
The lenders approved for the pilot include University of Virginia Community CU and Oregon’s SOFCU Community CU, along with 16 banks and mortgage lenders.
Participating lenders were selected based on their commitment to work in partnership with established home energy retrofit programs provided by states, cities, utilities and home performance contractors. These markets include, but are not limited to areas of the country participating in the U.S. Department of Energy’s Better Building Program. PowerSaver loans will be backed by the FHA but require these lenders to have significant “skin in the game.” FHA mortgage insurance will cover up to 90% of the loan amount in the event of default. Lenders will retain the remaining risk on each loan, incentivizing responsible underwriting and lending standards.
PowerSaver loans are only available to borrowers with good credit, manageable debt and at least some equity in their home (maximum 100% combined loan-to-value).