HUD Makes New Effort Pushing Energy-Savings Upgrades

As energy prices climb, much like everything else recently, the Biden Administration announced through the Department of Housing and Urban Development (HUD) that new measures are being put in place to help families served by HUD go green and install solar panels which will lower their electricity bill. 

According to their announcement, over 4.5 million low-income families are served by various HUD programs. It is the goal of the agency to connect those low-income families to programs at their regional and local offices to highlight federal funding sources— including funding streams from President Biden’s Bipartisan Infrastructure Law, and HUD programs such as Home Investment Partnerships Program and Community Development Block Grant HOME and CDBG that can be used to improve energy efficiency and lower utility costs for communities including HUD-assisted properties and residents. 

““The combination of extreme heat and rising utility prices creates a perfect storm, and HUD-assisted families and communities are some of the most vulnerable,” said Secretary Marcia L. Fudge. “The steps announced today by the Biden Administration will not only help families reduce utility costs, but also provide an opportunity for HUD-assisted residents to participate in the clean energy economy through local community solar programs.” 

New guidance to connect families to community solar power 

Hud has issued a national guidance bulletin to help ensure that residents of HUD-assisted housing can access these cost-saving community solar programs. Through their guidance, HUD shows that the 4.5 million families using its services could benefit from community solar programs which could reduce its members energy bills by about 10%, if not more. 

Small Rural Frozen Rolling Base Utility Program 

This program enables small rural housing authorities to retain utility cost savings from efficiency or capital investments from conservation measures. Today’s announcement includes a new educational campaign and partnership to encourage broader usage of the incentive and help housing authority partners with weatherization providers to access low-cost energy efficiency measures. HUD will also publish a list of eligible regions and buildings they own, and updated income eligibility requirements for the Department of Energy Weatherization Program. Click here to read more about the Small Rural Frozen Rolling Base Program. 

FHA’s 203(k) Rehabilitation Mortgage Insurance Program 

The HUD has acknowledged the urgent need for utility cost savings, so they are working to educate lenders and homebuyers about the products the Federal Housing Administration (FHA) offers for energy-efficient improvements that may help homeowners reduce their energy costs. 

The 203(k) Rehabilitation Mortgage Insurance program is FHA's primary program for the rehabilitation and repair of single-family properties. It is flexible and makes it easy to incorporate the costs of repairs into a loan when purchasing a home or refinancing a current mortgage. The eligible improvements include energy efficiency upgrades, energy-saving equipment, and energy generation improvements. The Limited 203(k) Mortgage permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. In Qualified Opportunity Zones (QOZ), the amount is up to $50,000 per home, enough to make a range of important and cost-saving energy improvements. 

FHA education and outreach 

• HUD Homeownership Centers offer training sessions on FHA products, programs, and policies throughout the year which includes the 203(k), Energy Efficient Mortgage, Weatherization, and Solar and Wind programs. These trainings are offered live and may be recorded; an example is the 2022 Single Family Housing Lender Training—Credit Underwriting: Session II conducted in June. 
• FHA is considering ways to make it easier for lenders and consumers to use the 203(k) Rehabilitation-Mortgage Program to make a range of home improvements, including those related to climate mitigation and energy efficiency improvements. When these changes are in place, FHA will execute a robust education and outreach plan to update consumers and lenders. 
• FHA is working with the appraisal community to develop strategies to ensure single family appraisers are aware of approaches for valuing energy- and hazard-mitigation-related improvements.