Funding Your Sustainable Renovation Project

With the cost of living being so high in Miami and other parts of Florida, it’s easy to feel discouraged about renovating your home. However, there are plenty of ways to fund your sustainable renovation projects that don’t involve going into debt or dipping into savings accounts that could be used for emergencies.

There’re various state initiatives and grants that could help you fund your sustainable renovation project in Miami, Florida. But understanding the process of obtaining funds id s critical step, so here are some tips on how to get started!

SELF – (Solar Energy Loan Fund)

SELF is a nonprofit community-based lending organization offering low-and-moderate income residents of Miami to fund their sustainable home improvement projects focused on energy efficiency, clean energy, and resiliency.

Currently, SELF is providing $3 million in financial support for more than 250 sustainable home renovation projects. They’re more focused on expanding solar energy and water efficiency retrofit as support for ambitious Climate Action Strategy goals.

With such, residents of Miami will have greater access to the funds they need to make their homes more energy-efficient and even go solar.

Some of the renovations that stand in this category are high-efficiency air conditioners, roof repairs, Solar panels, hurricane shutters, impact windows, and more. These measures not only improve the quality of living during harsh weather but can also reduce energy bills as well as home insurance rates.

SELF is more focused on working-class homeowners, veterans, single mothers, and people, in general, having poor credit access. They’re more interested in knowing the applicant’s ability to pay rather than typical criteria of credit scores or equity.

CWSRF Program (Clean Water State Revolving Fund)

Florida’s leading environmental protection state agency (DEP) offers low-interest loans under CWSRF for planning, designing, and constructing water pollution control facilities, including wastewater, stormwater, and relevant types of energy projects.

The department receives a number of funding requests each year that is sorted based on the type of project, and the funds are released every year and quarter. Small disadvantaged communities are also eligible for grants of funds available for planning loans, design, and construction loads.

CWSRF is offering financing rates average of less than 50% of the market rate. However, it can vary depending on the median household income, poverty, and unemployment index.

Green Buildings Certified by LEED

The Miami 21 Zoning code mandates the requirement for all new high-rise buildings of more than 50,000 square feet of habitable space to be a minimum of silver certification by the United States Green Building Council (USGBC) Leadership in Energy and Environmental Design (LEED) initiative.

If you’re the owner of the property, you enjoy an additional capacity bonus allowed by the U.S. Green building council for silver, gold, and platinum LEED-certified buildings.

- Silver – Less than 50,000 sq. ft. is allowed to get a bonus of 2% of the Floor lot ratio.

- Gold – allowed getting a bonus of 4% of the floor lot ratio.

- Platinum – allowed getting a bonus of 13% of the floor lot ratio.

Along with LEED silver category certification, there’re equivalent standards like NGBS (National Green Building Standards) silver for Zone 1 and FGBC (Florida Green Building Coalition) of high-rise residential standard version 2.0.

At the time of permit application, the owner has to post a performance bond on the basis of the area of the building. However, if the building doesn’t meet the requirements of LEED silver certification, a penalty is imposed, and funds are forfeited to the City of Miami.

Energy Efficient Mortgages Program (EEM)

In an attempt to achieve the national energy-efficiency goal and reduce pollution, EEM (energy Efficient Mortgages Program) allows homebuyers or homeowners to save money on utility bills. It enables them to finance the cost of adding energy-efficient features to a new building or a renovation housing project along with FHA-insured home purchase or refinancing mortgages.

In order to obtain an EEM, you must have a home energy rater conduct a home energy assessment or rating completed before applying for the financing. They assess the property on behalf of the lender to be sure that the home is energy-efficient and that all relevant improvement has been completed. They also provide estimated monthly energy savings.

These green building mortgages are offered by federally insured mortgage programs or secondary mortgage markets. Here’re some common mortgages or loan programs you could qualify for:

- Veterans Affairs Energy Efficient Mortgage – The U.S. Department of Veterans Affairs (V.A.) offers Energy Efficient mortgages for quality military personnel and veterans for financing energy improvements when purchasing an existing home.

- USDA Single Family Housing Loan Program – The U.S. Department of Agriculture USDA offers a Single Family Housing Guaranteed loan program that allows low-and-moderate income households the opportunity to own a home in eligible rural areas. If you can get quality for this loan, you can purchase, build, rehabilitate, or relocate a dwelling with 100% financing.

Federal Housing Administration (FHA) EEM Program

The EEM program by FHA allows homeowners to finance their energy-efficient improvements in their homes through FHA-insured mortgages. You need to qualify for the loan amount used for financing or purchasing a home and not need to qualify also for the financing of the energy-efficient improvements.

So, the cost for the energy-efficient improvement, as well as its assessment by the qualified energy assessor, will be added to your regular FHA loan amount. The additional amount for the energy-efficient improvements will be lesser than the following three criteria.

- 5% of the value of the property, or

- 115% of the median area price of a single-family dwelling, or

- 150% of the national conforming mortgage limit.

The bottom line

When you’re looking to make significant changes to your home, it can be daunting to arrange for funding for the renovations. But financing is still a critical part of any renovation with energy efficiency in mind.

A lot of homeowners are reluctant to undertake such improvements because of the first coat barrier that comes during decision-making. Calculating the Return on Investment (ROI) might give you confidence in decision-making and invest in energy efficiency. So, try to be smart, set your goals for energy-efficiency renovation, and create a workable financial action plan to cater to all the finances of your project.