The City of Sioux Falls Department of Community Development is accepting applications for the Furnace Replacement Program. This program may provide up to $3,000 to eligible homeowners for the replacement of older inefficient heating systems (less than 80% AFUE). Funding will be provided as a no-interest loan. If the homeowner retains ownership and remains in the home, 1/3 of the loan will be forgiven after the first full year from the date of the project close out and another 1/3 of the loan will be forgiven after the second full year. The remaining 1/3 of the principal loan balance will remain as a no-interest deferred loan until loan is paid and satisfied. If the property is sold or the owner discontinues occupancy, the remaining principal balance shall immediately become due and payable, until that time no payments are necessary. Homeowners, once approved, will obtain competitive bids from three (3) different licensed HVAC companies. Community Development will provide loan funds for the lowest competitive bid up to the $3,000.00 maximum. Homeowner’s will be responsible for any costs exceeding $3,000.00.

This program is made possible through funding from the Community Development Block Grant – Recovery (CDBG-R) Program as part of the Federal American Recovery and Reinvestment Act of 2009. This program is contingent on receipt of the federal funds. Funding for this program will be limited; therefore, interested applicants are encouraged to apply early. Applications will be date stamped and processed in the order they are received.

The objective for the Furnace Replacement Program is to foster energy independence. Replacing an older heating system with a new high efficient furnace may reduce your heating bills by as much as $497 the first year alone. Actual savings will depend on the furnace it is replacing, thermostat settings, and other factors. New furnaces may also be eligible for an Energy Tax Credit for 30% of furnace costs on your 2009 Federal Tax Return. Please consult with your tax advisor for further information.

For applications requirements and instructions, please download the document on the right.