Heating and Air Conditioning Financing Options

AlabamaWISE Financing

AlabamaWISE is a program that will provide a home energy efficiency loan to homeowners who wish to repair or replace the HVAC system, the insulation and other systems. The AlabamaWISE loan differs from other loan instruments in that it does not require an appraisal of a home to qualify. It is a personal, signature loan.

This loan is processed through a non-profit called the Nexus Energy Center in partnership with Alabama Department of Economic and Community Affairs funded by the Department of Energy Better Buildings Neighborhoods program. The loan program’s goal is to make homes more affordable by decreasing the expenditure on energy. They work with contractors who have not only complied with laws to be a licensed contractor in the state of Alabama, but have also educated themselves in regard to building science and energy conservation.

The contractor will assess and analyze insulation, heating and cooling, windows and doors, crawlspace and attic parameters, and the overall efficiency of a dwelling. They will create a prioritized list of areas of the home that need improvements. The cost of this estimation and assessment of the dwelling can be absorbed into the total loan.

Should you not need a loan, the program also offers rebates based on the assessment of the energy efficiency of your home. You may apply for this loan here: http://www.alabamawise.org/apply/

Federal Loan Programs

The Federal Housing Administration (FHA) through the PowerSaver loan program offers three different financing options for homeowners in the United States. The program is designed to help the citizens of America upgrade their homes energy efficiency and by doing so decrease the nations use of what are in some areas gradually decreasing natural resources.

In 2009, the Recovery through Retrofit initiative created the PowerSaver program and was the result of the combined efforts of the U.S. Department of Housing and Urban Development along with the Federal Housing Administration.

The technologies that are eligible for upgrades include:

There are three loan instruments offered by the PowerSaver program. The first is a home energy upgrade, unsecured loan up to $7,500.00. It does not require an appraisal or lien on property. Interest rates range from 4.99% to 7.75%. Eligible loan recipients will be asked to have a FICO score of at least 660, have reasonably good credit, and have managed any debt successfully.

This loan is for smaller projects that include things such as insulation, air or duct sealing, water heating, and upgrading/replacing HVAC equipment.

The second loan instrument offered is actually a second mortgage or first mortgage if one was never used for the purchase of the dwelling. This loan can be as much as $25,000.00 and can be used for home energy retrofits and various solar applications. Home appraisals and equity are not required. Potential borrowers cannot have had a home equity loan before, a second lien, or a second mortgage. Interest rates range from 4.99 to 9.99%.

This loan instrument is designed to cover the expenses related to solar hot water, geothermal applications, solar photovoltaic, retrofits for energy efficiency, and various kinds of renewable energy products.

The third loan instrument is an Energy Rehab Loan and is considered a first mortgage. Loan limits are set by the Federal Housing Administration. This loan is insured up to 100% of the purchase price or refinance, plus the additional cost of the items in the home being installed or retrofitted. The upper limit of the loan for a one unit property ranges from $217,500.00 to $625,500.00. Higher amounts are allowed for two to four unit properties.

This loan may be applied to:

These loans are also subject to the requirements of the actual lender.

Cherokee Electric Coop

This Cherokee Electric Cooperative offers loan instruments to residents of Alabama for energy improvements and for the purchase of central heat and air. It works with the Tennessee Valley Authority through the Energy Right program.