Homeowners can borrow up to $25,000 for home energy improvements under a new FHA home equity loan program announced today.
FHA PowerSaver is a two-year pilot program that will be made available through select lenders to qualified borrowers in certain parts of the country. Borrowers can use the funds to make energy efficiency improvements they desire, including insulation, new furnaces or air conditioners, geothermal systems, new doors or windows, water heaters and the like.
To qualify, borrowers must have at least some equity in their homes, a FICO credit score of 660 or above, and a total debt-to-income ratio of no more than 100 percent. The total loan-to-value ratio of all mortgages and home equity loans, including the PowerSaver loan, may not exceed 100 percent.
The program is designed to meet a growing demand among homeowners for energy efficiency improvements at a time when restrictive lending standards have limited their ability to obtain financing. It's estimated the program will assist up to 30,000 homeowners in its initial phase, according to HUD estimates, with the possibility that number may be increased based upon demand.
The loans will be provided through 18 approved to participate in the program, chosen in large part based on their willingness to work with existing home energy efficiency programs. The program will be generally, but not exclusively, available in those parts of the country where state and local governments are participating in the Better Buildings Program of the U.S. Department of Energy.
Approved lenders under the FHA PowerSave program are listed below.
AFC First Financial Corporation
Bank of Colorado
City of Boise, Idaho
Energy Finance Solutions
Neighbor's Financial Corporation
Paramount Equity Mortgage, Inc.
SOFCU Community Credit Union
Stonegate Mortgage Corporation
Sun West Mortgage Company, Inc.
The Bank at Broadmoor
University of Virginia Community Credit Union, Inc.
Viewtech Financial Services, Inc.
W. J. Bradley Mortgage Capital Corporation