Posted by: jimlyons | May 4, 2011

New “PowerSaver” Loans for High Efficiency Energy Home Improvements.


A new FHA loan program provides low cost loans for high efficiency energy home upgrades.

The FHA’s new program is called “PowerSaver” and allows eligible owners to borrow up to $25,000 at fixed rates between 5 percent and 7 percent for as long as 20 years to finance high-efficiency windows and doors, heating and ventilating systems, solar panels, geothermal systems, insulation and duct sealing, among other retrofits.

It’s officially a pilot program, but estimates are that 30,000 PowerSaver loans will be closed in the next two years. Eventually this program could become a major national program for residential energy upgrades.

Energy audits recommended by participating lenders might become a major element of this program-even though they currently aren’t mandatory. This energy-efficiency audit would provide an analysis by a certified specialist to pinpoint where your house is leaky or otherwise inefficient in energy use and would recommend the specific types of upgrades or additions that could help cut your bills and reduce greenhouse emissions.

Basic Guidelines for the FHA  to guarantee these PowerSaver loans up to $25,000.

*The house must be your principal residence, detached and single-family only. No rentals, no investor homes, no second homes.

*You’ll need to demonstrate that you are a solid credit risk. Minimum FICO credit scores of 660 are required, plus your total household monthly debt-to-income ratio cannot exceed 45 percent.

*Houses with negative equity will not qualify.

*Expect additional scrutiny from lenders on your personal finances-PowerSavers will cover only 90 percent of the lender’s loss or insurance claim in the event of a default.

If you are thinking about selling your home or just want some additional information about this loan product, call or email me to learn more about the pros and cons of this great program!

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