Making your new year to-do list? Maybe building a budget? If you are a homeowner, there are likely quite a few things on your to do list. I’d guess there are a lot of demands on your household budget too: mortgage, insurance, property taxes, maintenance and inevitably some improvements needed or desired.
Let’s talk improvements, since they are more fun than a mortgage, insurance, or taxes. Because we’re CUB, we’re going to talk about energy efficiency improvements such as air sealing, insulation, heating and cooling, windows, and water heaters. We know, it’s not as fun as talking about a new kitchen or bathroom — though if you’re planning to get new energy efficient appliances and fixtures, we’d love to talk about that too!
A smart investment in energy efficiency will save your household money in the long run and also increase your comfort – feeling warmer in the winter and cooler in the summer – but the initial cost is a common barrier for people to implement energy saving improvements. Some people have the option of being able to pay upfront, and others do not. Depending on the project cost, you may need to consider financing a project over a few months or several years.
The good news is there are several financing options available. For financing home improvements, you may be familiar with home equity loans, traditional loans through a bank or credit union, or using a credit card. While we are not finance experts, and do not give financial advice, we do want to share information about some low-interest loan programs offered in Minnesota that you may not have considered. This is not an all-inclusive list, but includes some additional options to consider.
The Minnesota Housing Finance Agency has made low-interest home improvement loans available at fixed rates. Some of the loans have income limits, and some do not. Some loans are forgivable if you meet the eligibility requirements and live in the property for a designated amount of time. Their website allows you to search for lenders that provide these home improvement loans. Details are provided below.
Several local communities offer low-interest home improvement loans in addition to the programs above. Check with your local town or county about options. For example, Ramsey County offers special deferred loan programs for income eligible households. Loans can be forgiven if the homeowner remains the home for 10 years. Some communities, such as Moorhead and St. Cloud, have Community Development Block Grant (CDBG) Loan Programs that can fund energy improvements.
The Center for Energy and Environment, a non-profit organization, has a Lending Center that administers several loan programs that are supported by the State of Minnesota (including the Fix Up Program) and local communities. Loan amounts, eligibility, interest rates, whether the loan is secured by a mortgage or unsecured, etc. vary across programs. See an overview of their programs here.
CUB likes to help you save money and energy. The biggest takeaway should be: Shop around, consider all your options, and find the best one for your household and situation.