Saving Money With HUD PowerSaver Program
The Federal Housing Administration has recently signed up 18 specially selected lenders to participate in a pilot program that offers some owners of Salem OR real estate “PowerSaver” loans of up to $25,000 to make their homes more energy efficient. Available only to homeowners with good credit, manageable debt, and some equity in their home, it is hoped that approximately 30,000 will qualify for the loans by installing insulation, duct work, doors and windows, HVAC systems, water heater, solar panels, and geothermal systems.
The loans will be backed by FHA insurance that will guarantee 90% of the amount in the case of default and promises a streamlined claims process; lenders will be liable for the remaining 10%to encourage responsible underwriting and lending standards. The length of the loan is 15 years (20 for renewable energy improvements), and it will be secured by the mortgage on the Salem OR real estate. Lenders will offer the loans at a lowered interest rate and charge reduced fees in an effort to attract consumers who are motivated to make their property more energy efficient but are hesitant to undertake an expensive project. The PowerSaver program is especially beneficial for homeowners who are ineligible for a home equity loan or for those without access to an affordable consumer loan.
Applicants for the program must have a minimum credit score of 600 and a maximum debt -to-income ratio of 45%. The Salem OR real estate to be improved must be a single unit, detached, owner-occupied home. Here is a list of the 18 participating lenders.
Lenders were selected largely based on their commitment to work in partnership with established home energy retrofit programs provided by states, cities, utilities, and home performance contractors primarily in areas of the U.S. participating in the Energy Department’s Better Building Program.
According to HUD Secretary Shaun Donovan, “We believe the market is right for a low-cost financing option for families who want energy-saving technologies in their home.” “Power Saver hits on all cylinders by helping credit-worthy homeowners finance these upgrades, cut their energy bills and boost the local job market in the process. While FHA and these lenders are jumpstarting this pilot, we hope its success will lead to a growing private sector interest in making these types of loans.”
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