Federal grant helps vintage home owners

(MCT) – For all its charm, energy efficiency was not one of the strong points of the 100-year-old house he bought in the Fourth and Gill neighborhood, Richard Baughman said.
Dec 26, 2013

(MCT) – For all its charm, energy efficiency was not one of the strong points of the 100-year-old house he bought in the Fourth and Gill neighborhood, Richard Baughman said.

It's a balloon-frame house -- a uniquely American style. In other construction styles, a house is built like a series of boxes, giving some natural insulating effect. But in a balloon-frame house, the exterior walls are largely open inside from the bottom to the top of the house. It's a light yet sturdy style, but it channels heat up the walls and out the top of the house.

"This house leaks like a sieve," Baughman said.

As a result, he became a candidate for a type of energy-efficiency loan that is apparently new to the Knoxville area.

Jeff Talman, renovation manager with AmeriFirst Home Mortgage, said Baughman is the first Knoxville homeowner he is aware of to take advantage of a U.S. Department of Housing and Urban Development PowerSaver grant through AmeriFirst.

With a PowerSaver grant, the borrower agrees to spend at least $3,500 in energy efficiency improvements. These can include installing approved insulation, installing energy-rated windows, buying Energy Star appliances and other measures. In return, the borrower gets $2,000 applied toward closing costs.

HUD selected AmeriFirst through a competitive process to take part in the PowerSaver grant program, according to a press statement from the company. Michigan-based AmeriFirst was awarded $1.1 million to help cover closing costs for homebuyers and homeowners interested in refinancing, when they agree to make green improvements to their homes.

AmeriFirst opened its Knoxville office in 2012, with Talman as its leader. Talman specializes in renovation financing, which is based on the projected value of a property after it has been renovated.

By using the grant, Baughman said he was able to have a Home Energy Rating System (HERS) rating of the house done. Talman said this is a step he doubts many vintage homebuyers would make otherwise.

"HUD's purpose, as I understand, is this is a trial to try to see if this additional incentive creates an additional motivation for people to go to the next level in energy efficiency," Talman said.

Baughman said the PowerSaver program has been very helpful.

"In addition to paying the closing costs, which is essentially some extra money I can put back into the renovations of the house, it also provided the HERS rating that gives me some really detailed information to guide the renovation as far as energy efficiency stuff," Baughman said.

He plans to replace a heating/air conditioning system that is at least 30 years old, add insulation to the roof and make other improvements.

Talman, a longtime Fourth and Gill resident who has been heavily involved in historic renovation work, said the market is changing. For years, buyers would be willing to put up with some of the energy inefficiency of older homes to enjoy their charm.

"Increasingly, that is a trade-off people are not willing to make," Talman said.

Buyers want more energy efficiency, even in older homes, and programs like PowerSaver are needed to help provide that, he said.

"We don't want living in old houses to be an irrational choice," Talman said.

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