“What Are the HERO Financing Pros and Cons?” Lou in Arden-Arcade, CA Asks an Expert

Our friend Lou out in Arden Arcade, CA has been hearing all about energy efficiency home upgrades and the way they can reduce heating and cooling costs over time. He’s also heard of HERO financing, which is a great way that folks in our area can pay for the initial investments that are required. Lou asks:

“Howdy, Bell Brothers! I’ve been living in Arden-Arcade, CA for a long while now, but just recently I’ve started to hear about something called HERO financing from many of my friends and neighbors. From what I understand, this is a financing program that helps you pay for things that make your home more energy efficient, like tankless water heaters, insulation, double pane windows, smart HVAC systems, and I don’t know what all else.

Now, I’ve personally been considering installing double pane windows for years and I think it’s time to finally take the plunge with help from a HERO loan. What are some HERO financing pros and cons? To be frank, it seems a little bit too good to be true. I know, I know…my friends tell me that it’s not, but I still want to hear it from the experts. Thanks!”

Thanks for writing, Lou! The pros and cons of HERO’s energy efficient financing are something I’m getting asked about more and more often from folks all over Northern California. So, it’s my pleasure to get a list together for you, Lou, as you do your due diligence on how to finance some energy efficient upgrades for your home. Homeowners in our area have a tremendous opportunity available to us through HERO financing, one that potentially saves money on heating and cooling costs, as well as on water usage, but it’s always wise to look before you leap. Or, in this case, maybe it should be to open the window before you climb through it?

HERO Financing Pros and Cons: The Benefits and Advantages of the Loan

Before we get started, let’s briefly go over what the HERO financing program is all about. A HERO loan can cover up to 100% of energy efficient or water saving upgrades for your home. HERO offers up to 25-year terms for loans, along with fixed rates for the money borrowed. Homeowners can borrow up to 15% of their home’s value to use toward home and appliance upgrades covered by the program. (Here are some frequently asked questions about HERO if you want to learn more.)

I’ve talked a lot in the past about how, with help from HERO-approved contractors, the loan offers affordable whole-home energy upgrades, so it’s probably no surprise that I’m anxious to go over the pros of HERO financing first. Simply put, a HERO loan is a great way for the majority of Northern California homeowners to take the financial plunge into making their home more efficient.

Here are some of the main HERO financing pros that immediately come to mind:

• Simple application process: HERO offers an easy online application process. You can find the HERO application here. However, an even easier way to go about this is by working with an experienced HERO contractor.
• Approval system: Unlike most financing offers, HERO is based primarily on the equity in your home and your debt payment history, rather than your credit score, making it easier for some homeowners to qualify.
• Payment structure: Here’s your cue to breath easy: there are no upfront payments required here because payments are made every year when you pay your property taxes.
• Flexibility: Terms range from 5 to 25 years, depending on what best suits you.
• Guarantees: When using HERO financing for home upgrades, homeowners must work with approved local contractors, as well as appliances that meet all levels of government efficiency and performance standards, meaning the benefits of your upgrades are guaranteed.

HERO Financing Pros and Cons: The One Disadvantage a Homeowner Must Know

Now, I’m a fan of the HERO financing program, so I don’t have as many cons for homeowners like Lou to consider, but there is one potential drawback you need to know before committing to working with HERO to obtain a loan:

• Selling your house: The most legitimate hesitation to participating in HERO financing is what happens if soon after you take out your loan you decide to sell your house? The loan is paid for through your property taxes, and it is possible to transfer it to the next owner, but I imagine it makes selling a whole lot harder (and let’s face it, selling a house isn’t the easiest thing in the world anyway). I always tell potential applicants to make sure they want to stay in their homes for at least the next five years. That way, they also get to enjoy the cost savings that come along with energy efficiency additions.

So, there you have it, Lou. There are plenty of pros to the HERO financing program and one big con. But, if you know you’re going to stay in your house for the years to come, you should be all good to take advantage of this in order to get those new windows you’ve had your eye on.

One last thing I want to stress, though, is that you simply have to work with a contractor familiar with the HERO financing program. They can make sure the application is done right, and they have plenty of experience installing the energy efficient touches you need. Luckily for you, our team at Bell Brothers is HERO approved! In fact, I bet we’ve even worked with some of your neighbors.

Contact the HVAC professionals at Bell Brothers to schedule a whole-house assessment for energy efficiency. We’ll offer recommendations and upgrades that are sure to increase your year-round comfort—and decrease your power bills.

Wondering how to finance a new HVAC system, windows, or plumbing? HERO is a unique financing option that helps California homeowners afford energy efficient upgrades to their home. Contact Bell Brothers, a HERO-approved contractor, to learn more. Our local HVAC, plumbing, and window specialists will walk you through the entire process, from applications to installation.

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