‘Home Improvement Loans’ Category
By CleanTechies at CleanTechies
Fri Nov 12, 2010 4:30pm EST
by Shari Shapiro
Yesterday the U.S. Department of Housing and Urban Development (HUD) announced a pilot program to finance $25 million in home efficiency upgrade loans: Backed by the Federal Housing Administration (FHA), these new FHA PowerSaver loans will offer homeowners up to $25,000 to make energy-efficient improvements of their choice, including the installation of insulation, duct sealing, doors and windows, HVAC systems, water heaters, solar panels, and geothermal systems.
Under the Pilot Program, HUD, through FHA-approved lenders, will insure loans for homeowners who are seeking to make energy improvements to their homes.
This pilot loan program is interesting in the wake of the Property Assessed Clean Energy (PACE) controversy, wherein property tax-based financing of home efficiency improvements were rejected by Fannie Mae and Freddie Mac, among others. More information on the PACE controversy is available here.
A big issue with the PACE structure was that the PACE loans were superior in priority to the mortgages.
Will the FHA Powersaver loans be subordinated to the mortgages on the homes? The guidance does not say.
The recession, which led millions of Americans to curtail their spending, brought a do-it-yourself mentality back to the fore – and even DIY solar installations are gaining in popularity. Before performing a solar installation sans professional assistance, though, it’s useful to consider the pros and cons of a DIY solar power project.
First, the pros. Doing any home-improvement project without hiring a professional can save buckets of money – whether it’s installing a new toilet, re-grouting a shower or painting a room – and the same goes for solar installations. This week, for example, technology website CNET profiled Massachusetts resident James Cormican, who installed his own solar array for just $10,000. That’s about a quarter of what a professional installation would cost.
Another reason to go DIY is that a person who does her own solar installation will understand the ins and outs of her work, so she’ll be capable of fixing or maintaining her array in the future. And a DIY project can provide a sense of accomplishment that would be missing if a professional contractor were hired.
There are downsides to doing a home-improvement project on one’s own, though. Generally – unless a homeowner happens to be a contractor himself – there’s a steep learning curve to most projects. That’s certainly true of solar installations, which require knowledge of electrical systems, experience with roofing and general contracting savvy. Even Cormican, the budget-conscious DIYer, had the help of an electrician in installing his array.
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Also worth keeping in mind is that professional contractors can be held liable in court if their work is subpar. If a homeowner does a shoddy job on his own solar installation, however, he’ll have no such recourse and will have to fix his array himself.
And there is, of course, the time factor. A solar installation is a major undertaking, and a homeowner with a full-time job simply may not have the time for a DIY solar project.
Before embarking on a DIY solar project, it’s smart to weigh both the pros and the cons of DIY. Going DIY on a solar installation can provide significant cost savings – but it may only be appropriate for people confident in their handiwork. For homeowners looking to go solar, DIY is certainly worth considering.
Home Automation Trends Converge To Drive Worldwide Adoption
Imagine ‘tweeting’ a command on Twitter to control the settings of your home equipment. Sounds far-fetched? Far from it. In his article titled ‘Growing the Connected Home Ecosystem’ as part of theConsumer Electronics Association’s annual 5 Technology Trends to Watch report, Ben Arnold writes about an engineer who does precisely that! In the world of consumer electronics, ‘convergence’ is a ubiquitous word; even so, the convergence of home automation systems with social networking is a major new trend.
‘Smart homes’ and the home automation market poised for rapid growth
A recent study forecasts the global smart homes market to touch $13.4 billion by 2014, growing at a CAGR of 16.5% from 2009 to 2014. Apart from the worldwide demographic shift owing to a rise in the ageing population, other factors expected to contribute to this boom include government initiatives as well as rising personal incomes, particularly in Asia.
Similarly, ABI Research predicts that home automation system shipments will exceed $11.8 billion in value by 2015, encompassing the luxury, mainstream, DIY and managed segments of the home automation market. While the study also highlighted a significant lack of awareness about home automation systems, it concludes that the market is reaching an inflection point as vendors and integrators adopt various strategies to increase penetration. The three key areas that are taking this industry to the tipping point are energy management, home control and security.
Mobile (smart) telephony, wireless Internet connectivity takes home automation mainstream
According to the CEA, over 50 per cent of US households own a laptop computer and more than one-fourth have a smart phone. Consequently, home automation system manufacturers have moved fast to facilitate the use of their products using these smart devices.
The availability of custom applications contributed by developers from around the world, specially built for these devices— particularly iPhones and iPads—has changed the market irreversibly, albeit very positively. To put it simply, home automation systems have been made more accessible, significantly less expensive, and considerably more user-friendly.
Applications driving greater adoption
Residential security/ home monitoring stands out as one of the key drivers of home automation systems. As a segment that addresses our inherent fear of loss, this sector has received a serious impetus with the advancements in mobile technology and Internet connectivity.
Similarly, the ability to control and reduce expenditure on utilities with remote energy management will help penetrate home automation systems into more homes. Whether it is switching off lights or regulating the thermostat from anywhere in the world, energy management powered by smart phones and tablet PCs (the category that the iPad probably fits in best) is an extremely attractive proposition. In fact, some experts predict that energy management will be the future of the home automation industry.
Further, users will be keen to use the same system to control other systems at home such as home entertainment systems.
The market is likely to open up for a new category of users capable of self-installing their home automation systems, as these systems become much simpler and inexpensive to use. The fact that stand-alone applications are also offered will also entice first-time buyers or smaller-home users to adopt such systems.
The health sector is also forecast to be an important driver of home automation applications in the near future. According to Parks Associates, the wireless home healthcare market is expected to grow to $4.4 billion by 2013. For example, the CEA report points to products that can be brought online at home to facilitate remote monitoring and treatment of patients as well as specialized devices designed to monitor health diagnostics or manage pain and medication levels. While tele-medicine is not new as a concept, the greater adoption of home automation systems connected to the Internet is bound to make a serious impact in this space.
Control and convenience
The smart home automation ecosystem today focuses primarily on security and utility management, giving users real-time control over almost all the mechanisms in the house. As Ben Arnold writes in the CEA report, “Consumers now can control all of the home’s systems while at home or away. The result is smart, real-time control over virtually every mechanism in the house. The goal of this interconnected Web of actions is a smarter, more energy efficient home tailored to the homeowner’s lifestyle.” We will also continue to see the transformation of the mobile phone in parallel with home automation adoption: from a device that has evolved to handle 3 Cs – Communication, Content, Commerce- we can now add a 4th one: Control.
Ben Flux is an entrepreneur and angel investor with multiple businesses in the realms of Web-based services and mobile applications. To read more of his articles, please visit his columnist page.
» posted on Saturday, June 5th, 2010 at 11:07 pm by Woody Wilson viewed 556 times
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By Sequoia on 05/29/2010 – 4:06 am PDT
The Energy Efficient Mortgage (EEM) offered through the Federal Housing Administration (FHA) and its qualified lenders allows homeowners to receive a larger mortgage to improve the efficiency of a home. Essentially, this mortgage covers not just the initial cost of the property but also the cost of energy improvements. As a result, the loan can exceed standard FHA limits. The FHA provides this option with the understanding that the utility costs of the home will be far lower after improvements, allowing the homeowner to pay more toward a mortgage.
The process to secure an EEM is similar to the process to secure any FHA-insured loan. You must first qualify for a private mortgage loan, and then you must apply for the FHA guarantee. When you are working with an FHA-qualified lender, you can do both at once. The FHA guarantee is a form of insurance on your loan. To qualify, you must be deemed credit worthy. The FHA’s standards are among the highest in the industry. However, the FHA does assist with low down payment options. Through this program, you can purchase a home with as little as 3.5 percent down, and you are guaranteed a fixed-rate mortgage.
EEM Home Inspection
Once you qualify for the loan, the home you are purchasing must also qualify for the energy improvements. The process to qualify a home takes place through an efficiency inspection. Inspectors factor in the various considerations for the property, such as the year it was built, the quality of insulation and the appliances present. Inspectors then carry out a test where air is blown through the home to measure the ducts and ventilation. Ultimately, the inspectors input all of the information into a computer program to generate a Home Energy Rating (HER).
The Home Energy Rating System (HERS) is an index based on a reference created in 2006. If a home is equal to this reference point in terms of efficiency, the home receives a HERS score of 100. A net zero home, meaning a house that creates all the energy it uses, will score a HERS rating of 0. The home under inspection will be rated somewhere along this scale or beyond this scale. Then, the inspectors will estimate what the home’s HERS rating will be based on several improvements to increase the efficiency of the property. The cost to make these improvements is added to the mortgage.
Benefits of an EEM Loan
Many EEM users are eco-conscious, and they desire to live in a home that has a lower impact on the environment. Even if you are not extremely “green,” there are several fiscal benefits to the larger mortgage. Theoretically, you will be spending the same amount on the home either way, since the extra mortgage will be covered through utility savings. If this is the case, then you will net a gain as a result of the improvements. Homes that are energy efficient sell at higher prices. The updates and changes to the home will put money in your pocket when it comes time to sell.