March 2009

Maine First State to Launch Groundbreaking ENERGY STAR® Mortgage Program

 “We have been working for months to get this ENERGY STAR loan designation and we are very proud to be the first housing authority to do so,” said Maine State Housing Authority Director Dale McCormick, speaking at a press conference on Feb. 20 in Gardiner, Maine. “It’s a wonderful program, and we are doing as much as we can to promote ENERGY STAR mortgages, and help people in Maine weatherize our homes.”

(Read EPC’s press release and Maine Housing’s press release press release on the program launch.)

The ENERGY STAR mortgage incorporates the cost of energy-efficiency investments into the total lending package, and results in dual savings: lower overall monthly mortgage payments compared to a conventional mortgage, and reduced monthly energy bills for years to come.

The home improvements must lead to a minimum 20% energy savings. Borrowers will also receive an additional financial benefit above and beyond the home energy savings, such as a reduction in interest rates, assistance with closing costs, or other benefits.

(Please see Quick Facts on the ENERGY STAR Mortgage Program for more information)

The program is directed by the Washington, D.C. – based Energy Programs Consortium, in  collaboration with the U.S. Department of Energy, the U.S. Environmental Protection Agency, state energy and housing agencies, with support from the Ford and Surdna foundations.

McCormick said that the record energy prices last summer took a huge tool on many families in the state, many of whom live in homes in dire need of weatherization improvements (please see   related story on Maine Housing.) In response, officials accelerated their efforts to create products that would enable families to obtain financing for energy efficient home improvements through Maine Housing and its partner banks.

“There is an incredible link between energy savings and housing and energy savings and buildings,” said McCormick. “Forty percent of our energy use and the carbon that we emit is in buildings. So if you weatherize homes, you’ll conserve fuel, lower the carbon footprint, save families money, and keep money in the state economy,” she said.

One of the benefits of the new ENERGY STAR Mortgage Program is that it combines the services provided by state housing and energy programs to make it easier -- and faster -- for homeowners eligible for grants or other public aid to get assistance.

“We’ve found over the years of working with different state energy agencies and state housing finance agencies that it’s very, very difficult to merge energy assistance work with housing assistance work,” said George McCarthy, director of Urban Regeneration and the Ford Foundation. “Maine is leading the pack, and we’re gratified and we want to tell this story so that others will start to follow.”

EPC is working with several other states that plan to launch the program this year.

“This really is the start of, hopefully, a national program,” said EPC Director Mark Wolfe. “What we’re seeing is that it can be done in Maine, and hopefully it can be done elsewhere,” he said.

So far, nine banks have been approved to offer ENERGY STAR loans in Maine under the program. (Click here for more information on participating lenders).