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HELP and Other Loan and Grant Programs to Fund Energy System Upgrades for Homeowners and Homebuyers

Owning your own home and being able to invest in your own property is an amazing feeling, but there are many Pennsylvania families who are unable to make basic improvements so their HVAC systems are both safe and efficient. The various costs of heating and cooling your house add up, but there are financing alternatives for when you need to upgrade your existing system or make costly repairs.

In total, HVAC equipment, repairs, routine maintenance, and your utility bills will cost at least a few thousand dollars per year. (On average, the annual cost is $2,000 per family in Pennsylvania.) Energy efficient products and rebate programs can help offset costs, but the work needed to make your home compatible with these newer systems can add up. This is why there are grant and low-interest loan programs to help with these initiatives. You are able to get the money you need upfront to pay for energy-efficient products or needed repairs.

Homeowners Energy Efficiency Loan Program (HELP)

Regular repairs and maintenance can be extremely costly on existing equipment, let alone spending extra to upgrade a system so that it’s more energy efficient. The PA Housing Finance Agency (PHFA) offers a program to provide low-cost loans for a specific list of energy efficiency repairs. HVAC repairs that are eligible for funding include energy efficient heating or cooling system repairs or replacements as well as insulation and ductwork.

Financing options through HELP include loans between $1,000 and $10,000 for eligible recipients. These loans are unlike anything someone would get from a bank, as they have very low interest at a fixed rate of one percent for 10 years. (So a recipient would pay around $44 per month for a $5,000 loan over 10 years.) This allows those who may not be able to budget for improvements to access the funds they need without having to resort to taking out loans with extremely high-interest rates, especially for a relatively small amount. These loans are structured so that recipients have very low monthly loan payments over a longer period of time, which makes it so repaying this loan won’t jeopardize recipients being able to pay their other expenses. Plus, there aren’t any penalties for paying off the loan early.

HELP loans are available for households with one or several members, depending on income, which can be calculated either annually or by a monthly average. For example, a family of four can qualify if their annual pre-tax household income is less than $56k, or if the monthly household income is less than $4,667. These limits may be increased based on the median income in your area, as the PHFA evaluates these applications on a case by case basis. Download the application to get started. https://www.phfa.org/forms/heelp/borrower_application_pkg.pdf.

Weatherization Assistance Program (WX)

Low-income households have a resource for free energy audits and repairs on their home based on the audit report. The goal of these audits is to implement the most energy efficient, utility cost-saving products or perform repairs on existing systems which are still following industry standards for efficiency. Services include heating system modification, repair, or replacement as well as installing insulation in areas where there are gaps or faulty insulation. In addition, technicians train recipients on what they can do to keep things running as safely as possible versus when they will need to call a professional team.

Average funding for this program is around $7,000.00, though funding per family is based on home audit results and what services are deemed necessary. Requirements are balanced between energy efficiency and increase the safety of the home. Eligible recipients are at or below 200% of the federal poverty level, and the program prioritizes high-risk residents such as disabled persons, the elderly, and families with children.

Energy Mortgages

If you’re getting ready to purchase a new home and are dedicated to pursuing energy efficiency from the beginning, the Energy Efficient Mortgage Program through the Department of Housing and Urban Development insures new or refinanced mortgages and the cost of making energy efficient improvements to the home. Borrowers do not need to qualify for a loan amount with a lender to cover the total of the mortgage and planned improvements, but just the mortgage. (HUD insures the rest.) These loans do have strict guidelines to qualify, as the planned improvements must be equal to or less than the money saved on energy from the improvements.

In addition, the department’s Weatherization policy allows borrowers to finance up to $3,500 for weatherization improvements, such as new efficient thermostats and insulation. This is often used in addition to the insured mortgage.

Search for an FHA approved lender to find out more about energy mortgages in your area: https://www.hud.gov/program_offices/housing/sfh/lender/lenderlist.

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