Are you thinking about ways to increase the energy efficiency of your home? Maybe you’re considering adding home insulation, or replacing your old dryer or furnace with Energy Star Models. Everyone gains from energy efficient homes. Making your home more energy-efficient can bring you many benefits, including:

• Improved comfort
• Increased home value
• Lower carbon footprint
• Reduced utility bills.

Home energy projects can be costly, and you may be wondering how you can cover your home improvement costs, particularly if you haven’t built equity in your home. Home improvement financing solutions may be as close as your utility or green energy companies. Read on to learn about financing through energy companies, and if it is right for you.

Energy Company Financing Basics

Fannie Mae, a private corporation under a congressional charter, has teamed up with local utilities and green energy companies to offer affordable homeowner financing for energy efficient home improvements. Fannie May purchases loans from local lenders to ensure availability of funds. Residential energy efficiency improvement loans are available in many areas of the country. Depending on the type of loan offered to customers of your particular utility provider, qualifying home improvements may include:

• Energy Star appliances
• Heating and cooling systems
• Insulation
• Water heaters (including solar)
• Windows.

These loans are unsecured, which means you don’t have to have equity in your home or provide other collateral. You’ll have to pass a credit check, however, and your rating may affect your interest rates.

Contact your utility company to see if they participate in energy efficiency financing. Your utility company may also be able to tell you about cash rebates offered for upgrading to Energy Star equipment.

Benefits of Residential Energy Efficiency Improvement Loans

If your utility company participates in Fannie Mae’s energy improvement loan program, you’ll be able to enjoy many advantages. Some of these include:

• Below market fixed-interest rates (In some cases, interest-free financing may be available.)
• No prepayment penalties
• The ability to make multiple energy improvements with one loan
• Typical loan amounts of up to $15,000
• Up to 10 years to repay your loan.

Finding a Contractor

In order to take advantage of energy efficient home improvement financing through your utility provider, you’ll be required to use one of their approved contractors. You should receive a list of approved contractors with your other financing paperwork. Here are some tips for selecting the contractor that is right for you:

• Check out prospective contractors ratings with the Better Business Bureau.
• Get estimates from at least three approved contractors, and take the time to interview each of them to get a feel for their experience and honesty.
• Request references from all contractors you contact, and check them to make sure that their customers were satisfied with the work done.