Energy Efficient Home Improvement Loans

With the huge destruction in our environment, the US government is pushing its citizens to go green. They encourage people to make improvements to their homes and make changes in their everyday lives to conserve energy. To make their campaign even more realistic and easy to apply, they created grants and even tripled the tax credit for energy efficiency home improvements. People can now apply for these when they decide to participate in the conservation of limited resources. In addition, energy efficiency in the home can save huge amount on utility bills and more. There are a few energy efficient home improvement loans available and below are just a few applicable loans in this category.

FHA title home improvement
This is a type of loan available for people who need financing for moderate home improvements. To become eligible for this loan you must have a relatively good credit rating. That means a score of no less than 650 on your current credit score. The maximum amount of loan for a single family home is $25,000, whilst for manufactured homes or property that gives a monthly income is $17,500. For a manufactured property on your personal property the maximum amount of loan is $7,500 and for multi structure units, you can borrow up to about $60,000. There are no required home energy rating reports and the loan is payable in twenty years.

FHA 203(k) rehabilitation program
This type of loan provides financing to home purchases as well as the cost of repair on an existing home. To receive approval of this loan, you need to be a resident of the home to be repaired for at least a year and the home repair cost should be more than $5,000. Making a home more energy efficient or landscaping the backyard can be included in reasons to apply for this type of loan. The program allows the borrower to complete renovations after the loan closes. The money will then be placed in an escrow account that is released as improvements are implemented. The total value of the property must still be within the FHA mortgage limit for that particular vicinity. The value of the property is computed by the cost of the renovation in addition to the value of the home before the renovation.

Housing repair and rehabilitation loans
This is not just a loan, but also a grant given to residents in rural areas with very low income. This helps them to afford the cost of home renovation and repair. This is one of the best types of loans available not just because the interest rates are low, but because they also give out free money to people aged 62 and above, who need to undertake home repairs. The maximum loan available is $20,000 and the grant amount is up to $7,500.

Energy efficient home mortgage
Energy Efficient Home Mortgage, also known as EEM, is a type of loan that can be used for both existing and newly purchased homes. For new buyers, the loan can finance 100% of the total energy efficient home improvements required, but for existing homes the amount that can be borrowed is 15% of the total cost. The great thing about this loan is the fact that it has below the market interest rate. You can loan up to $15,000. It is payable in 10 years and it is an unsecured financing option.

There are other loans that you can use if you need them. The government is serious about providing loans for home improvement that will promote energy efficiency and conservation of natural resources. They even provide annual tax credit, which by the way was improved from $500 in 2008 to $1,500 in 2009 and up to the present time. This is a huge tax credit on top of the savings that you will get from renovating your home. People spend thousands of dollars per year on utility bills. You can reduce that expense by simply gearing towards energy efficiency.

For example, you can install photovoltaic solar panels. It can generate just about enough energy to help cut down your energy bills by more than 50% on your first month. You can have energy efficient windows and doors. Doors and windows account for almost 30% of loss of heat and about 75% of heat gain inside your home. You can either place UV reflective coatings on your window or install storm windows that pass the IECC specifications. This will help you reduce your usage for both heating and cooling systems. For water heaters, you can simply have an efficient water heating system installed by a professional. It could reduce to up to 28% of your total energy consumption.