The U.S. Department of Housing and Urban Development (HUD) has selected 18 lenders to participate in a pilot program designed to finance homeowners' energy-improvement initiatives.
Under the FHA PowerSaver Program, lenders will be able to offer Federal Housing Administration (FHA)-insured loans of up to $25,000 to finance energy-efficient improvements, including the installation of insulation, duct sealing, replacement doors and windows, HVAC systems, water heaters, solar panels and geothermal systems.
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. 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), HUD says.
Initially, the two-year pilot program is estimated to help approximately 30,000 homeowners. According to HUD projections, more than 3,000 jobs will be created through this pilot program, and the impact may be larger if market demand for the loan program increases over time.
Click here to view HUD's statement on the program and a list of the 18 approved lenders.
SOURCE: HUD