The Department of Housing and Urban Development launched a two-year pilot program for borrowers to apply for up to $25,000 in loans to make homes more energy-efficient. The Federal Housing Administration will back the loans made by 18 national, regional and local lenders through the PowerSaver program. The improvements can include installing insulation, duct sealing, replacement doors and windows, heating, venting and air conditioning systems, water heaters, solar panels and even geothermal systems. Only owner-occupants can apply. "We believe the market is right for a low-cost financing option for families who want energy-saving technologies in their home," said HUD Secretary Shaun Donovan. "PowerSaver hits on all cylinders by helping credit-worthy homeowners finance these upgrades, cut their energy bills and boost the local job market in the process. While FHA and these lenders are jumpstarting this pilot, we hope its success will lead to a growing private sector interest in making these types of loans." Lenders will keep "skin in the game" on these loans. The FHA will cover up to 90% of the amount in case of default. Lenders will retain the remaining risk on each loan. The loans can only go to borrowers with at least 660 credit scores and at least some equity in their home. A maximum loan-to-value ratio was set at 100%. Interest rates will be set between 5% and 7%, and term limits can be as long as 20 years. The loans will generally be secured by a subordinate lien on the an existing first mortgage. Write to Jon Prior. Follow him on Twitter @JonAPrior.