Owning an energy-efficient home is electrifying and admirable to many modern homeowners. However, upgrading your home to be energy efficient can sometimes cost tens of thousands, which could sometimes kill the dreams of homeowners looking to upgrade. Fortunately, you could consider various financing options to cover these costs up-front or at your convenience. Below, we discuss five of these options so you can get started with your energy-efficient remodeling project.
5 Ways to Finance Energy-Efficient Upgrades in a Modern Home
Payday Loans
Payday loans are an unlikely source of home upgrade financing, which places security against your upcoming income. While they look minimal and insignificant, weekend payday loans can finance minor upgrades like upgrading to smart appliances and fixing broken ones. This type of loan is ideal when you run short of funds during your upgrade project and need a boost to finish what you started.
Bank or Credit Union Loans
Most credit union green upgrade loans are unsecured, which means you won’t need to use your property as the loan collateral. These loans finance energy-efficient home upgrades like Energy Star appliances, dual pane windows, solar panels, and insulation. These loans usually attract interest between 6% and 9%, and you can borrow up to $50,000 repayable within ten years, depending on your qualifications and the bank.
Product Specific Financing
Since energy-efficient upgrades can be super expensive sometimes, homeowners prefer going for specific product financing at a time to break down the cost. These could be anything from solar-powered water heaters and boilers to HVAC units installed in the backyard. The common practice is approaching an energy supplier offering interest-free loans to install such appliances.
Once you secure a good loan deal, you have two choices for servicing your loan. You can always choose between a small percentage upfront payment and clearing the balance in installments or directly go for monthly installments with zero deposits.
U.S. Department of Agriculture (USDA) Loans
Through the Energy Efficiency Conservation Loan Program (EECLP), the USDA offers loans to finance conservation and energy efficiency programs for residential, commercial, and industrial consumers. If you’re building a green project in rural areas, you can benefit from this program by borrowing funds tied to Treasury interest rates. You can equally re-lend this money to new development energy service products within your territory.
You can use this loan to set up on-bill financing programs to help customers under your territory achieve efficient energy measures and repay loans to the distribution utility on time. So, if your business directly or indirectly provides retail electric services to rural dwellers, you can qualify for this USDA loan.
Green Mortgage
Under this mortgage, the bank or mortgage lender offers you preferential terms if you can prove the property for which you’re borrowing meets the requisite environmental standards. This mortgage could be for building a new home within existing sustainability ratings or upgrading an existing building to improve environmental ratings. In simple terms, green mortgages are mortgages specifically targeted at green buildings.
Your desire to live in a green home is much easier to achieve now that numerous loan options are on the market. Regardless of your financing option, ensure you get the best loan terms, especially if you’re going for a long-term loan for bigger projects.
Conclusion
In conclusion, financing energy-efficient upgrades in a modern home has become increasingly accessible through a variety of financial avenues. Whether opting for payday loans for immediate, short-term solutions, securing more substantial funding through bank or credit union loans, or exploring product-specific financing options directly related to energy-efficient appliances and systems, homeowners have several paths to consider.
Additionally, the U.S. Department of Agriculture (USDA) loans offer support for rural homeowners seeking to enhance their home’s energy efficiency, while green mortgages present a comprehensive approach by incorporating the cost of energy-saving upgrades into the home mortgage. Each of these financing options provides a unique set of benefits tailored to different financial situations, goals, and project scopes.
By carefully evaluating these paths, homeowners can make informed decisions that not only improve their living environment but also contribute to a more sustainable future. Ultimately, investing in energy-efficient upgrades is a wise decision that pays dividends in comfort, sustainability, and potentially, the long-term financial value of the home.
