The Impact of Home Energy Retrofit Loan Insurance: A Pilot Program

The PowerSaver pilot program will increase the availability of affordable financing for consumers who want to make energy-saving improvements to their homes. The program results from a congressional directive to conduct a pilot of energy-efficient mortgage innovation. The US Department of Housing an...

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Bibliographic Details
Published in:Cityscape (Washington, D.C.) D.C.), 2011-01, Vol.13 (3), p.237-249
Main Author: McFarlane, Alastair
Format: Article
Language:English
Subjects:
Capital assets
Consumers
Cost benefit ratio
Cost control
Discount rates
Emission standards
Emissions
Energy
Energy conservation
Energy consumption
Energy efficiency
Energy industry
Energy prices
Failure
Financial investments
Greenhouse gases
Home financing
Home improvement
Home repair & remodeling
Homeowners
Homeowners insurance
Households
Impact
Investment return rates
Lines of credit
Loan financing
Loans
Mortgage loans
Pilot projects
Property titles
Rates of return
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Summary:The PowerSaver pilot program will increase the availability of affordable financing for consumers who want to make energy-saving improvements to their homes. The program results from a congressional directive to conduct a pilot of energy-efficient mortgage innovation. The US Department of Housing and Urban Development responded to the directive with PowerSaver, a program in which the Federal Housing Administration offers insurance for home improvement loans to finance improvements that foster lower energy consumption. The FHA guarantee will motivate both lenders and loan investors to participate in financing energy-efficient improvements and to create a secondary market. The types of loans currently available are all problematic. Unsecured consumer loans or credit card products for home improvements typically charge high interest rates. The purpose of the PowerSaver pilot program is to test and demonstrate the feasibility of low-cost financing for secured home energy retrofit loans. Although other financing options are available for consumers, these alternative programs typically experience minimal usage.
ISSN:1936-007X
1939-1935