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Remarks of Secretary Shaun Donovan at a Press Conference Announcing FHA PowerSaver

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Date:
Location: Bohemia, NY

Thank you all for being here today -- it's a pleasure to be back in my home state of New York with outstanding partners like Secretary Chu and Congressman Israel.

They are champions for middle class families -- and they understand just how important energy efficiency is to those families struggling with high energy costs, and to fulfilling President Obama's goal of "winning the future."

After all, we can't out-compete the rest of the world as long as American families spend $200 billion every year in home energy bills.

We can't out-build our global competitors when, for homeowners who want to make energy-efficient improvements, it's hard to find an affordable financing option.

And we can't out-innovate the competition unless the private sector has the tools it needs to unleash the Clean Energy Economy of the 21st century.

One way the Obama Administration is responding to these challenges is with FHA PowerSaver, a new initiative we are officially launching today. PowerSaver will allow more families to realize the benefits of lower home energy bills, less pollution, and more jobs.

In November, Secretary Chu and I unveiled the PowerSaver concept alongside Vice-President Biden.

Today, I'm proud to once again join Secretary Chu, on the day before Earth Day, to announce that 17 lenders will participate in the two-year PowerSaver Pilot Program -- including Energy Finance Solutions, which will offer PowerSaver loans across the state of New York.

With PowerSaver, homeowners can borrow up to $25,000 over a period as long as 20 years to make energy efficiency and renewable energy improvements to their homes.

We designed PowerSaver not just to help drive demand for home energy improvements and local jobs -- but also to help create a real capital market for home energy improvement financing.

This means private lenders will not only be participants in this process, but central to its success.

Indeed, as a group our pilot lenders expect to provide more than 30,000 loans across the country in the next few years, creating more than 3,000 jobs in the pilot phase alone.

To support that lending, FHA will guarantee up to 90 percent of the loan with a streamlined insurance claims process.

Importantly, PowerSaver provides real protections for homeowners, as well as the taxpayer -- requiring responsible underwriting criteria and guidelines and financed independently of our FHA Single Family program.

PowerSaver loans will only available to borrowers with solid credit, manageable overall debt and some equity in their home.

Lenders will be required to have real "skin in the game" as well, giving them an incentive to make quality loans with sound underwriting.

And to ensure that homeowners make the most informed decisions possible, PowerSaver lenders will work closely with well established local home energy programs, like those sponsored in New York for years by NYSERDA -- so that they are aware of the most impactful, cost-effective improvements that can be made to their homes.

And of course, local businesses will make sure the work gets done right -- here on Long Island, Energy Finance Solutions will work closely with firms like Energy Testing Services, who I want to thank for their hospitality in hosting us.

Lastly, PowerSaver will take advantage of the data we gather on its performance. We will be tracking energy saved, bills reduced and value created.

With better data that proves these investments pay for themselves in the long run, we believe PowerSaver can unlock a broader scale of transformation.

It's a model we know works, with the Federal government pioneering an innovative product that the private sector can then take to scale -- indeed, it was FHA that began the 30-year fixed-rate mortgage.

So, this is an exciting moment, as we give communities a flexible tool to finance home energy improvements in their markets -- and work to reduce our dependence on foreign oil, help families save on energy costs, and create jobs for the Clean Energy Economy we need to win the future.

That is what PowerSaver is about -- and now, let me introduce someone who knows how important this effort is to our families, and to our future -- my colleague at the Department of Energy, Secretary Steven Chu. Thank you.


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