Making that old house energy efficient

It's the home-improver's old lament: You can't afford to. You can't afford not to.

The same dilemma faces many homeowners who'd like to reduce their fat utility bills but may not have the means to latch onto the latest energy-saving materials and gizmos.

Certainly, you can't afford to bore holes in the walls of a drafty, 30-year-old tract home to reinsulate it, and perhaps can't replace that antiquated air-conditioning system to save what might just be the monthly equivalent of a dinner tab at a casual diner.

But there are some relatively easy moves that even the most cash-strapped homeowners can make that will yield an immediate payback.

And for those committed to a more capital-intensive remodeling or addition, there are a few new lending programs that credit owners for anticipated future energy savings.

While pondering the energy-mortgage plunge, consider a few interim savings tricks that even the most adamant "can't-do-it-myselfer" can actually do.

Buy a programmable thermostat, especially if a home is vacant during the brunt of the daytime hours, says Harry Misuriello, Director of National programs for The Alliance to Save Energy. "It's about 50 to 80 bucks in a blister pack at your home improvement center and most people can install it themselves," he said. "Set it to turn on a half hour before the first person gets home ... It pays back pretty quickly."

Also add more energy-efficient insulation to your attic, preferably with a resistance rating of R-21 to R-30, Misuriello says. "It's pretty easy to roll on."

Plus, caulk over cracks around windows and invest in a few weather-stripping kits if you've got drafty doors, Misurielle said. A quarter-inch gap at the bottom of a standard door can equal the energy loss of a 3-inch-by-3-inch hole in the wall, energy experts say.

Lighting can be a drain, as well. Compact fluorescent bulbs are much more energy-efficient than standard candescent bulbs and usually last for years instead of months, said Dana Bres, research engineer for the Washington, D.C.-based Partnership for Advancing Technology in Housing.

"They cost more but typically produce the equivalent amount of light with about a fifth of the power,"' he said. "At 12 to 15 watts, you get the equivalent of 60 watts, and they will last from 7,000 to 15,000 hours, consume little power and generate little heat, so you're not paying your air conditioner a lot of money to remove that heat." (Side note: Keep some standard bulbs around for reading to avoid eye strain.)

Also illuminating are potential savings from Energy Star labeled windows. Energy Star windows, which can save up to 15 percent of a home's energy bill, are twice as efficient as the average window built just 10 years ago, and are thicker and block out more sound, say energy consultants.

But replacing windows can run into thousands of dollars, as can optimally efficient new appliances or that major capital offender, a new central-cooling/heating system.

So if you are thinking overhaul, consider an Energy Efficient Mortgage. When buying, selling, refinancing or remodeling a house, homeowners can actually save money in the long run with the still little-known EEM, which is federally recognized, available in all 50 states and can be applied to most home mortgages, says the U.S. Department of Energy.

Because such energy-saving homeowners will have lower utility bills and thus more cash in their pockets at the end of the month, they can afford a larger mortgage payment, plus have a more comfy and marketable house, the logic goes.

The Fannie Mae energy-mortgage program allows homeowners to borrow up to 15 percent over the value of a home with no additional down payment and no additional income to qualify, said Steve Baden, executive director of RESNET, which promotes home-energy ratings systems and energy mortgages.

The first step, he says, is to have a Home Energy Ratings System efficiency inspector (cost: about $300) to probe the place and give it an energy rating similar to a car's miles-per-gallon estimate. Factors such as insulation, appliance efficiency, window types, sealing, climate and utility rates are all considered. The home is then rated between 1 and 100, with higher scores indicating greater efficiency.

A consumer then takes that information to a lender and asks for an energy mortgage.

In 2001, Countrywide Home Loans began marketing the EEMs. A few others have followed suit, such as Priority Mortgage Corp, a mortgage company that specializes in EEMs. You can even use Fannie Mae's "Find a lender search" to locate a mortgage company in your state that offers EEMs.

Regional energy ratings will vary, as will materials and appliances currently in vogue.

For example, horizontal-access washing machines, which have become the rage in Europe, are now catching on in much of the United States.

Horizontal units fill only their bottom portion and in essence splash clothes through a wash. According to the Environmental Protection Agency, horizontal-axis washing machines use 35 to 50 percent less water and 50 percent less energy per load than conventional units, which fill their entire tubs to begin a wash. People on well systems in high-drought areas find them very beneficial.

Insulation materials, wall thickness and other components will also differ market to market.

Now on the horizon are energy-efficiency tax incentives for both residential and commercial construction. The recently enacted Energy Tax Incentives Act of 2005 will kick in incentives, in the form of tax credits, for home energy improvements.

Under the new Energy Bill, homeowners can claim a tax credit of 10 percent of the cost of certain energy improvements, up to $500 total. Homeowners who install solar technology get more generous credits: 30 percent of the cost, up to $2,000. Such tax credits, which can be claimed on 2006 and 2007 tax returns, can be considered as additional income in loan qualification, says Michelle Desiderio, senior product developer at Fannie Mae.