The FHA Power Saver was developed as part of the Recovery through Retrofit initiative. Power saver mortgages are Federal Housing Administration (FHA) insured, FHA PowerSaver loans will offer homeowners up to $25,000 to make certain energy-efficient improvements, including the installation of insulation, duct sealing, doors and windows, HVAC systems, water heaters, solar panels, and geothermal systems.

FHA Power Saver loans are backed by the federal housing administration. 90 percent of the loan amount by the FHA and 10 percent by the commercial lender. Making the lenders responsible for 10 percent of loss if the mortgage defaults will ensure responsible under writting. In addition, lenders may be eligible for additional grant payments from FHA to enhance benefits to borrowers, such as lower interest rates.

To be eligible borrowers must have credit scores of at least 660 and their total debt to income ratios cannot exceed 45 percent. The combined loan-to-value ratio for all loans on a home, including the PowerSaver loan, cannot exceed 100 percent.

The Vice President  said, “The initiatives announced today are putting the Recovery Through Retrofit report’s recommendations into action – giving American families the tools they need to invest in home energy upgrades. Together, these programs will grow the home retrofit industry and help middle class families save money and energy.”

Vice President Biden’s Middle Class Task Force developed this program to expand green job opportunities in the United States and boost energy savings by improving home energy efficiency.