Taking the Chill Out of Residential Efficiency Improvements

by Peter Thomas Ricci


Jon A. Levey is co-founder, executive vice president and chief lending officer at GreenChoice Bank

You visit a homeowner who wants to sell, but the house is drafty. Maybe it has an older furnace, poor insulation or both. Or, your client is about to purchase an older home.

You suggest upgrades to make the home more attractive for resale or more comfortable for the new owner, but your client hasn’t budgeted for those. Despite the current economy, homeowners don’t have to forgo or limit their energy efficiency improvements – money is available.

The solution: Energy ImpACT Illinois (EI2), a residential loan program for Chicago and Rockford. GreenChoice Bank joined forces with the Chicago Metropolitan Agency for Planning (CMAP), Delta Institute and other organizations to offer loans that make energy-efficiency upgrades affordable and attractive to homebuyers.

The Delta Institute, which works with diverse partners from across the Great Lakes region to promote a green economy, serves as an administrator for contractors reporting in the EI2 program. Once work is finished and homeowners are satisfied, they complete a survey that triggers payment from the loan to the contractor.

The EI2 program came about when partners realized the benefits of a coordinated approach to developing opportunities for energy efficiency for homes and businesses. The program provides simplified access to information, financial mechanisms and workforce resources that empower people to make their own positive impact through energy reduction.

Much of the housing in the Chicago area is aged, and older housing stock frequently lacks adequate insulation. EI2 loan funds can be used for anything that a certified energy auditor recommends would save 15 percent or more on a home’s energy bill. It can also be used for certain specific projects, including upgrading boilers, furnaces, water heaters, programmable thermostats or central air conditioning.

EI2 loans can be used for the following types of efficiency upgrades:

  • Boiler or furnace with additional items – if done in conjunction with a boiler or furnace upgrade, then water heaters, programmable thermostats, central air conditioning and other Energy Star appliances and equipment are eligible. They must be installed by a participating heating/cooling contractor.
  • Whole home improvements – anything recommended by a certified energy auditor that results in a comprehensive savings of 15 percent or more. They must be installed by a participating energy upgrade contractor.

Loans over $10,000 will be considered and must still entail energy-efficient improvements that meet the above guidelines. Typically, these loans don’t go over $10 million – not because that’s the limit, but because they are not typically used for anything higher than that amount.

For smaller projects, the bank offers unsecured credit of up to $10,000. To ensure quality control, projects must be completed by contractors that have been vetted by the program. Contractors are not paid until the homeowner is satisfied that the work has been completed properly.

GreenChoice Bank allows borrowers to repay over a longer period of time – up to seven years – meaning energy savings can help offset the borrower’s loan payments. Homeowners can also apply for utility company rebates or tax grants to this loan program, and currently CMAP and Delta Institute are offering an incentive that equals approximately one year of interest on the loan.

For example, Gary and Erica Cuneen of Oak Park expect to save $2,400 each year as a result of the home improvements they made using an EI2 loan from GreenChoice Bank. Not only does the loan make the property more comfortable, it will be more valuable should they ever decide to sell.

The application process is straightforward: homeowners fill out a short application form (the application fee is waived when they open an account with GreenChoice Bank and choose to repay their loan via auto-debits from that account) and submit it to the lender  directly. Decisions are quick and often made within a day of submission.

While good credit is a prerequisite, as a locally-owned, relationship-driven community bank, GreenChoice Bank ensures that each application is reviewed by a senior decision-maker.

Jon A. Levey is co-founder, executive vice president and chief lending officer at GreenChoice Bank. Additionally, he is a realtor and an Illinois Broker with NAR Green Designation. A seasoned executive, Levey possesses 20 years of real estate, finance and entrepreneurial expertise. his background includes commercial lending, real estate finance and sales. CMAP and Delta Institute facilitated the program in partnership with the cities of Chicago and Rockford, ComEd, Department of Commerce and Economic Opportunity, Illinois Science & Technology Coalition, Nicor Gas, North Shore Gas, Peoples Gas and The Northern Illinois Energy Project. For more, visit www.greenchoicebank.com/energy-impact-loans.aspx.

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