Conserve Energy, Save Money on Bills, with These Florida Home Loans
Your perfect house may not be brand new. If this is the case, you have a pair of options to apply for:
- A Florida home improvement loan
- An energy-efficient mortgage
Let’s talk about the latter for now. As home energy bills soar, government agencies and private lenders are offering homeowners thousands of dollars in financing to seal off drafty windows and purchase energy-saving appliances.
These long-term, low-interest Florida home loans are aimed at efficiency-minded homeowners who want to cut their utility bills. Borrowers can often arrange 30-year loan periods and interest rates are typically below 10%.
Help with older appliances
Home buyers that find the ideal house with ancient heating and cooling systems can add an additional $35,000 to their mortgage to improve the energy efficiency of the property using a Federal Housing Authority program.
While the program is aimed at allowing home buyers to tackle a broad array of home improvement projects, such as adding a new roof and replacing the plumbing, the funds can be used to upgrade a heating or air conditioning system, add insulation, weatherize doors and windows and purchase high-efficiency appliances.
Similar to green mortgages, The Federal Housing Authority’s Streamline K loan program was unveiled in April, 2005 and offers a 30-year mortgage with a fixed or adjustable interest rate set at current market rates.
The average Florida home loan loan for the program is between $18,000 and $20,000. A couple hundred loans have been administered since the program launched last year, but FHA sees interest among lenders ramping up as energy costs sky-rocket.
“When people are buying a house particularly if it is an older house … they want at this point to reduce their bills,” Doris Ikle, president of CMC Energy Services, in Bethesda, Md said. Yet buyers often have no money left for improvements once they close on a Florida home loan, she added. This should help.
Steps for this sort of Florida home loan
The process for receiving funds still adds several steps to a home closing, which can make sellers resistant. Once a bid on a home is accepted it can take 60 days to complete the FHA process and reach closing, so finding a patient seller is helpful.
But a softening housing market is likely to boost the program’s prospects. In the absence of bidding wars and with houses sitting on the market longer, sellers - especially those whose houses may not be up to modern standards - may be more willing to entertain less traditional offers.
FHA also offers smaller “energy efficient” mortgages that let homeowners purchase or refinance a home and tuck the cost of efficiency upgrades into a mortgage. Borrowers can add between $4,000 and $8,000 to a 30- or 15-year mortgage to pay for energy improvements.
The upside is that a borrower does not have to make a down payment on the additional financing. In order to have improvements approved a homeowner must show that the value of the energy saved over the life of the upgrade is more than the total cost of the upgrade.
It’s all worth considering. As energy costs leads to less demand in areas such as the Tampa housing market, any sort of assistance would be welcome.
