Many Peterborough homeowners know that upgrades like attic insulation and new windows could lower their energy bills, but the upfront costs are simply too much to budget.
Better Homes Peterborough was launched by the City of Peterborough to help overcome that barrier with low-interest financing.
How can a municipality provide a loan? With a policy mechanism called a local improvement charge (LIC). This unique type of financing is tied to the property instead of the person — and it may be just what you need to upgrade your own home.
What is LIC financing?
Local improvement charges are temporary fees added to a property tax bill to pay for improvements that benefit the property owners. Traditionally, they have been used to recover the costs of block-level infrastructure, such as street repaving or expanded sewage lines.
More recently, municipalities have been using LICs to help individual homeowners finance energy efficiency measures, which contribute to larger municipal goals.
LIC financing helps spread the cost of upgrades over many years, making it easier for homeowners to invest in improvements that save energy and reduce emissions.
Instead of paying the full cost upfront or borrowing through a bank, the homeowner repays the cost over time through a charge added to the existing property tax bill. This financing option is offered by the City of Peterborough through the Better Homes Peterborough program.
What makes LIC financing different than a bank loan?
While other types of financing can help with upfront costs, LIC loans have unique characteristics that make them a better choice for some homeowners.
Most importantly, LIC financing is tied to the property, not the individual. If the homeowner decides to sell the home, the new owner can take over repayment charges on the property tax, while benefiting from the energy saving upgrades already in place.
Why might LIC financing be a good choice?
Reduced upfront costs. LIC financing lets you cover upfront expenses and repay the cost over a longer period. With the Better Homes Peterborough loan, the repayment period, called a term, is 15 years.
Ability to undertake deeper retrofits with better results. Access to financing can support a whole-home approach, allowing you to complete multiple upgrades at once instead of less effective, piecemeal improvements.
Flexibility to pay off the balance at any time. Unlike some loan types, LICs give you the option to pay off the remaining balance at any time, with no penalty.
Who is eligible for LIC financing?
BHPTBO is designed to be accessible to as many homeowners as possible, regardless of income. To be eligible:
- The property must be a residential building: detached, semi-detached, townhouse, or multi-unit buildings of 3 storeys or less
- All property owners must agree to program enrollment
- The property must have a property tax account with the City of Peterborough
- Property taxes and all other payment obligations to the City of Peterborough must be in good standing
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What other financing options are available?
LIC financing can be a perfect option for many people, but Better Homes Peterborough also offers the choice to borrow through Kawartha Financial Services. This option has a different interest rate, term, and minimum lending amount. Most importantly, since this financing option is linked to the individual borrower, it may affect their credit rating – positively or negatively.
Not sure which financing path would be right for you? Our Program Guide is here to answer questions, offer trusted information, and start you on the pathway to a more comfortable, energy-efficient home.
Call us at 1-888-284-9417 or email betterhomesptbo@envirocente.ca to get started.