HUD just started offering a pilot program that offers low-cost loans for energy saving home improvements. This program will offer up to $25,000 to borrowers who want to improve the energy efficiency of their home. It will cover HVAC upgrades, water heaters, insulation, door and window upgrades and such "green" favorites as solar and geothermal systems.
This program is named PowerSaver and is a result of the Recovery Through Retrofit program. The program is designed to offer loans to borrowers who can't get a HELOC, but who have good credit and are not upside-down in their homes.
Does this sound like a good idea to you? IMHO it's just another way for home owners to get in trouble. If the program actually makes a large number of loans, I'm betting that there will be a high percentage of defaults within the next two years. The great thing is that FHA MIP will cover 90% of the loan in case of default (Oh, wait! Doesn't that mean the taxpayers will cover it?)
Maybe I'm wrong about this. What's your opinion? Do you know anyone who is going to apply for one of these?
Comments(2)