Guild teams with Home Depot to roll appliance buys into mortgage

Guild Mortgage is partnering with The Home Depot to allow homebuyers to finance energy-efficient appliance purchases by rolling the cost into their mortgage.

Among the items available for purchase using the GreenSmart Advantage program are refrigerators, clothes washers and dryers, dishwashers and smart thermostats. Besides saving on the cost, these new homeowners will save on future utility bills.

"We know utility costs can be a big expense for homeowners and replacing old, outdated appliances add to those costs," Guild CEO Mary Ann McGarry said in a press release. "Beyond the cost savings, this program gives homeowners peace of mind that comes from knowing they'll have brand new, energy-efficient appliances that are better for the environment."

Consumers can finance energy- or water-efficient improvements costing up to 5% of a home's appraised value using a Federal Housing Administration loan. It is available to both first-time and repeat homebuyers. The borrower must make a 3.5% down payment and a credit score above 580 is required to qualify.

The program is not available for other loan programs and refinancing borrowers cannot use it, though the lender is looking into expanding the program to the latter group. Home Depot is the only retailer Guild is working with on this kind of offering.

"FHA has the flexibility to allow financing the cost of improvements into the total sales price," said Erin Watts, vice president, product strategy at Guild. "Other programs require that down payment be based on the lower of the appraised value or the sales price without the financing of the improvements."

An approved homebuyer goes online to shop from a virtual showroom of energy-efficient appliances. Their list is submitted to The Home Depot, which issues a final invoice to Guild. Guild then adds the cost into the purchase mortgage. When the loan closes, Guild coordinates with The Home Depot to schedule delivery and installation of the appliances.