Financing Options: FHA PowerSaver Loan Program

This financial resource, provided by the Federal Housing Administration (FHA), offers three financing options for homeowners to make sustainable and renewable energy upgrades to homes. Borrowers must select from a list of Housing and Urban Development approved PowerSaver lenders. Additionally, this program is not available in all states, so be sure to check availability at the HUD website. The products offered by this program include: PowerSaver Home Energy Upgrade, PowerSaver Second Mortgage (Title I), and PowerSaver Energy Rehab (203(k)).

 

The PowerSaver Home Energy Upgrade is the smallest consumer loan available under this program—up to $7,000. It is an unsecured loan intended for smaller projects, such as insulation, air and duct sealing, water heating, and/or replacing heating and cooling equipment. Single-family homeowners may qualify for this product if their debt is manageable and they have a credit score of 660 or higher. Though interest rates vary, they typically range from 4.99$-7.75%.

 

The PowerSaver Second Mortgage is a loan for up to $25,000. It is intended for financing larger projects, including energy efficiency, PV systems, solar hot water, geothermal, or other renewable energy projects. To qualify for this product, borrowers cannot have an already-existing home equity loan, a second lien, or second mortgage. Interest rates can range from 4.99% to 9.99%, and the maximum loan term is 20 years.

 

The PowerSaver Energy Rehab product, a 203(k) loan, is the largest available. It is intended for home purchase or refinance and targets home buyers who want to combine home improvements with a home purchase. This is also a great option for homeowners wanting to include hoe improvements while refinancing an existing mortgage. It is FHA-insured up to 100%, and current loan limits vary by area—from $217,000 to $625,000.

 

To be eligible for the FHA PowerSaver Loan Program, homeowners must have a minimum credit score of 660 and a maximum total debt-to-income ration of 45%. Additionally, these products are only available to single-unit, owner-occupied, principal residence properties. For more information about eligibility and eligible measures, we recommend reviewing the guide available at Energy.Gov.