How to Finance Energy Efficiency Improvements

Loans for energy efficiency improvements help make upgrades accessible to homeowners and renters alike. Replacing, adding, and upgrading insulation and installing energy-efficient appliances can make a tremendous difference.  

For homeowners and renters, these changes save a significant amount of money on energy bills. It can also reduce the demand on utilities and lead to environmental benefits by reducing greenhouse gas emissions. Although making these improvements is a relatively fast and cost-effective process, many people can’t afford to make the changes out of pocket.  

Efficiency-oriented renovations can help keep homes cooler in summer and warmer in winter. Standard offers a variety of financing options and can also help connect homeowners and renters with grants and other programs to make improvements attainable for everyone. 

If you’re ready to feel more comfortable in your home, learning how to get a loan for home renovations is an essential first step. Let’s take a closer look at some of the available options and how to determine if you qualify.  

Home Improvement Loans: What Do Lenders Look For? 

The exact requirements for insulation financing and other energy improvement loans vary, depending on the type of loan and the company financing it. For example, an energy-efficient mortgage or refinance has different requirements than loans provided by heating and air companies that offer financing. In either case, some of the common factors lenders look for include: 

Home Energy Ratings 

Getting a home energy assessment can be helpful, whether lenders require it or not. Standard’s BPI-certified auditors provide a thorough assessment using infrared scans and other testing methods to identify safety concerns and efficiency issues. Some lenders require this rating to determine if an applicant qualifies for an energy improvement loan. It’s also beneficial for pinpointing the areas that need upgrades the most.  

Credit Score 

In most cases, lenders review the borrower’s credit score as part of the approval process. Applicants with scores as low as 580 to 620 may still qualify for a loan. However, the lower the credit score, the higher the loan’s interest rate will likely be. 

Income 

Like other loans, loans for energy efficiency improvements consider income as part of the approval process. Borrowers need a regular income source, and lenders also look at the debt-to-income ratio. You can calculate this by dividing your monthly debts, such as credit cards, car loans, and mortgage payments, by your gross monthly income. In general, the lower the ratio, the better your odds of approval and getting a loan with favorable terms.  

How to Get Financing for HVAC, Insulation, and Other Upgrades with Standard 

Standard has long believed in the power of energy upgrades and the importance of making these changes more accessible to everyone. We partner with two products to offer fixed-rate and no-interest financing to meet our customers’ unique needs. Standard’s flexible financing options are available through the following sources: 

GreenSky Financing 

Like Standard, GreenSky believes in empowering its customers. With flexible terms, GreenSky home improvement loans make it easier for homeowners and renters to afford upgrades to HVAC systems, insulation, and more. This option provides increased spending power, a fast online application process, and quick approval, usually within 15 minutes. Fixed-rate loans are available for 84- or 120-month terms. GreenSky also has two options for no-interest financing. 

NYSERDA Financing 

NYSERDA offers another choice for home energy improvement loans. With interest rates as low as 3.49%, NYSERDA financing options include Smart Energy Loans and On-Bill Recovery. Smart Energy Loans are traditional unsecured loans for amounts ranging from $1,500 to $25,000.  

On-Bill Recovery provides an option for consumers to pay through their utility bills. Payments are capped by the amount of energy savings the upgrades provide. For example, if you’re replacing insulation and projected to save $100 per month, the On-Bill loan payment won’t be more than $100 per month. Another unique feature of this loan option is that the balance transfers to the new owner in the event of the property’s sale. 

EmPower+: Help for Those Who Don’t Qualify for Financing 

For Upstate New Yorkers with poor credit or other circumstances that prevent them from getting a loan, another option may be available. Working with the EmPower+ program, Standard has been able to help thousands of homeowners and renters get free or low-cost energy upgrades.  

The program is income-based, and those who qualify can get no-cost improvements, including installation of energy-efficient heating and cooling systems, free insulation, and upgraded fixtures and appliances. Applicants who don’t qualify for the traditional EmPower Program may qualify for EmPower PLUS, which pays for up to 50% of eligible upgrades, up to a maximum of $5,000. 

Contact Standard to Learn More 

Standard offers grants, rebates, and loans for energy efficiency improvements to help you live more comfortably while saving money on utilities. Contact us online or by phone at 855-923-5149 to learn more about financing options or to schedule a free consultation.