Jeff Silver had a $32,000 laundry list of home improvements he needed to finance to make his Emeryville, Calif., house more energy efficient. That included replacing his aging water heater, installing a light tube, and not least of all, installing a furnace.
The home’s existing furnace was in his upstairs tenants’ apartment. “The only way to control the temperature was in their unit, so I couldn’t turn the heat on and off,” Silver said.
But instead of trying to obtain a home equity line of credit from a bank—no easy task these day—he financed his home improvements through CaliforniaFIRST, a new program that makes it easier for Californians to pay for low-flow toilets, solar panels, and other energy-efficiency measures that cut a home’s carbon and water footprint. (In the United States, homes consume 22 percent of the nation’s energy and, along with commercial buildings, account for 10 percent of the country’s greenhouse gas emissions.)
How easy? CaliforniaFIRST requires no money down and no credit report. Banks not needed. The program, financed by private investors working with local governments, launched on Tuesday in 17 California counties and is rolling out across the U.S.
Home owners can obtain between $5,000 and $200,000 and pay back the loans through a surcharge on their annual property tax bills.
“You get approved for funding based on whether you have equity in your home and pay your taxes and mortgage,” said Cliff Staton, executive vice president of Renewable Funding, the Oakland, Calif., company that runs CaliforniaFIRST.
There are catches.
“You can’t have any delinquencies for the last three years, and you must have at least 10 percent equity in your home,” said Staton.
Interest rates range from 6 percent to 8.75 percent, depending on the term of the loan, which can be set at 5, 10, 15, or 20 years.
For Silver, that means he’ll be paying an extra $500 on his property tax bill for the next 15 years. That equates to a 7 percent interest rate.
“In general terms, about a third of the state of California is eligible for this program,” said Ori Skloot, a Richmond, Calif.–based general contractor who performs energy-efficiency upgrades for CaliforniaFIRST clients.
To find out if they are eligible for the program, home owners can call CaliforniaFIRST, apply online, or speak to program-approved contractors, which are listed on the organization’s website.
The program will make going solar particularly easy and attractive, given the state and federal subsidies available to home owners.
“When combining rebates with the CaliforniaFIRST financing, people who install solar are finding that they’re paying less to finance their system than they were paying [utility] Pacific Gas & Electric for electricity,” Skloot said.
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Original article from TakePart