Are you using too much energy? Do you need to improve the efficiency of your home? Butler Rural Electric Cooperative offers loans to qualifying members for energy efficiency improvements, air-source heat pumps and geothermal systems at 100 percent of the cost of the project up to $25,000. The current interest rate is 3.5%. By making these improvements, you can increase the energy efficiency of your home and lower your electric bill.
Types of Loans
Energy Efficiency Loans
These loans can be for insulation, weather stripping, caulking, storm and thermal windows and doors, and clock or electronic thermostats. Typical insulation products will qualify such as cellulose, fiberglass batts or rolls, rigid or foam boards, and expanding spray foam. Windows and doors must be ENERGY STAR rated with a maximum U factor of .30.
These loans can be for upgrading services, meter pole changes, rewiring projects, power quality equipment, backup generators and disconnect switches, and correction of unsafe electrical conditions.
Air-Source Heat Pump and Central A/C Loans
To qualify for the heat pump loan, the heat pump must be ENERGY STAR rated. Current standards include a minimum SEER of 15 and minimum HSPF of 8.2 (single package system) or 8.5 (split system). To qualify for the the central a/c unit loan, the central a/c unit must be ENERGY STAR rated with a minimum SEER of 15 and EER of 12 (single package system) or 12.5 (split system). Central a/c loans are only available for qualifying members who have never had central a/c previously.
This will include all labor, duct work, excavation, pipe and materials. To qualify for the loan, the geothermal system must be ENERGY STAR rated. Current standards include a minimum EER of 17.1 and COP of 3.6.
Please Note: New construction homes, manufactured homes and distributed generation systems do not qualify for the loan program.
To apply for a low-interest loan, the member, who must also be the owner of the property, must complete a loan application. If appropriate, a co-applicant may be required. No work that is to be paid for by loan funds should be completed before the loan is approved. A $15 application fee will be applied to all applications approved or denied. For a loan application, click here.
An energy audit will be required for all HVAC loans prior to approval. This requirement is to ensure the home is energy efficient and that the new system is a good investment for the home. The cooperative offers energy audits for $150. The $150 will be reimbursed if the member installs a geothermal system or heat pump or if the member makes the significant recommended energy efficiency changes within one year of the audit. To learn more about energy audits, click here.
We will have a pre-approval within 72 hours of receiving the application. If pre-approved, we will need a copy of the member's last year's W-2 or last few pay stubs to verify income and a copy of the bid or estimate of the job. If the loan amount is over $2,000, we require filing a mortgage with the county and will need a copy of your recorded deed.
Upon approval for a loan, members must show proof of insurance. Members will also pay closing costs of $15 for the application fee, $24 for UCC filing fee, $57 origination fee and $68 for mortgage filing fee if a second mortgage is required (if loan amount is greater than $2,000). Additional fees may apply.
The length of the loan depends on the amount borrowed. The minimum term of any loan is 12 months.
$500-$2,499: up to 18 months
$2,500-$4,999: up to 48 months
$5,000-$9,999: up to 60 months
$10,000-$25,000: up to 120 months
Required for all geothermal and heat pump installations (replacements excluded) prior to approval.
All loans follow a normal amortization schedule. The loan payment is billed to the member on the monthly electric bill. The due date and payment amount will be detailed on each month’s bill. In addition, the bill will itemize the principal amount and interest amount owed for the current month.
There is no pre-payment penalty. The loan can be paid off in full at any point in time without penalty.
Low interest rate loans are available through the cooperative. Rates are subject to change without notice. Please consult a tax advisor as to whether the interest on the loan is tax deductible.