What the HEAT Loan Is (and Isn't)
The HEAT Loan is a 0% APR personal loan issued by participating Massachusetts banks specifically for Mass Save-qualifying energy efficiency projects. Mass Save (via its administering utilities) subsidizes 100% of the interest payment so the borrower pays only principal.
What it IS:
- Personal loan (unsecured — no lien on your home).
- 0% APR throughout the term.
- Principal $1,000-$50,000.
- Term 12-84 months (7 years).
- Disbursed directly to contractor (or borrower) at install completion.
What it is NOT:
- Not a home equity loan or HELOC (no collateral required, no second mortgage).
- Not a credit card (fixed term, fixed monthly payment).
- Not a mortgage (separate product, no impact on existing mortgage).
- Not income-restricted (any qualifying credit score eligible).
What Qualifies for HEAT Loan Financing
HEAT Loan funds projects on the Mass Save-qualifying list. Major categories:
HVAC Equipment
- Cold-climate heat pumps (whole-home or partial)
- Heat pump water heaters
- High-efficiency gas/oil furnaces (95%+ AFUE)
- Mini-split systems
- Smart thermostats with installation
Envelope
- Air sealing
- Attic, wall, basement insulation
- Energy Star windows
- Insulated exterior doors
Electrical
- Panel upgrades (when paired with electrification)
- EV charger install
- Solar PV install (some banks)
What Doesn't Qualify
- Cosmetic renovations (kitchen, bathroom)
- Roofing replacement (unless solar component)
- General home improvements not on Mass Save list
- DIY-installed equipment
How to Apply
Application is through your chosen participating bank, NOT through Mass Save directly. The 5-step process:
Total time: PT2W
- Step 01
Get contractor quote with Mass Save eligibility certification
Mass Save authorized contractor (e.g., Pro Build) provides written quote on official letterhead with HPC ID + Mass Save filing certification. The bank uses this quote to size the loan. - Step 02
Choose participating bank + apply online
Visit masssave.com/saving/financial-incentives/heat-loan for the current list of 14+ participating banks. Each bank has its own online application portal. Applications take 10-20 minutes. - Step 03
Provide income verification + credit check
Banks pull credit (soft inquiry first, hard at approval). Minimum credit score typically 660 for full approval; 600-659 may be approved with co-signer or higher down payment. Income verification: 2 most recent pay stubs OR last year tax return. - Step 04
Receive approval + signed loan documents
Same-day to 10-day approval. Sign loan documents electronically. Funds are NOT disbursed yet — they release at install completion. - Step 05
Contractor installs + bank disburses funds
Pro Build (or your contractor) completes the install + submits proof of completion to the bank. Bank disburses funds within 5-15 business days. Loan repayment begins the following month.
Stacking with Mass Save Rebates
The HEAT Loan funds the FULL install cost upfront. The Mass Save rebate arrives 6-10 weeks later. Best practice: apply the rebate as principal prepayment to the loan, accelerating payoff and reducing total interest (though interest is $0, this still reduces months of payment).
Worked example for a $22,000 heat pump install:
- Day 0: HEAT Loan funds $22,000 at install completion. Monthly payment $262 over 84 months ($22,000 ÷ 84).
- Week 8: Mass Save $10,000 rebate check arrives.
- Homeowner applies rebate to loan principal: balance drops to $12,000.
- Bank recalculates: same monthly payment of $262, payoff accelerated to month 46 (instead of 84).
Alternative: keep monthly payment, redirect $10K to other use. Either path is fine; the math is equivalent. The HEAT Loan's 0% APR means there's no penalty for either choice.
Frequently Asked Questions
Is the HEAT Loan really 0% APR?
Yes. The interest rate IS 0%. Mass Save (via the utility energy efficiency surcharge funds) pays the bank's interest cost on the homeowner's behalf. The borrower pays only principal. There may be a small loan origination fee at some banks ($50-$150) but the interest itself is genuinely zero.
What credit score do I need for the HEAT Loan?
Most participating banks require 660+ for full approval at standard terms. 600-659 may be approved with co-signer, larger down payment, or lower loan amount. Below 600: rare approval. The HEAT Loan is unsecured, so banks underwrite it like any personal loan.
Can I use the HEAT Loan for partial-scope projects?
Yes. The loan can fund any portion of a qualifying project. Common use: full $50K loan covers heat pump + insulation + panel upgrade as bundled project. Partial use also fine: $8K loan for HPWH only.
Does the HEAT Loan affect my mortgage application?
Yes — like any personal loan, the HEAT Loan appears on your credit report and counts toward your debt-to-income ratio. If you're planning to refinance or apply for a new mortgage in the next 12 months, time the HEAT Loan accordingly. The 0% APR makes the monthly payment lower than equivalent home equity loans, minimizing DTI impact.
Can I prepay the HEAT Loan?
Yes — no prepayment penalty at any participating bank. Standard practice: apply Mass Save rebate as principal prepayment to accelerate payoff. Federal IRA tax credits at year-end can also be applied.
What happens if I sell my home before paying off the HEAT Loan?
The HEAT Loan is unsecured personal loan — it does NOT transfer with the home. The remaining balance becomes due at sale OR you continue paying it monthly until paid off. Most homeowners use sale proceeds to pay off the loan at closing.
Can I use the HEAT Loan for a new construction project?
Generally no — HEAT Loan is for retrofit/upgrade of existing homes. New construction is funded through construction loans + traditional financing. Once the home is occupied as primary residence, post-completion energy efficiency upgrades qualify for HEAT Loan.
Do all 14 participating banks offer the same terms?
Identical 0% APR, same maximum $50K, same 7-year max term across all participating banks. Differences: origination fees ($0 to $150), credit score thresholds (660-680 typical), application processing speed (same-day to 10 days), customer service experience. Pro Build's most-recommended: Eastern Bank (fastest approval) and Cambridge Savings (most flexible underwriting for marginal credit).
References & Sources
- Mass Save HEAT Loan program details. https://www.masssave.com/saving/financial-incentives/heat-loan
- Eastern Bank HEAT Loan. https://www.easternbank.com/personal/borrow/heat-loan
- Cambridge Savings Bank HEAT Loan. https://www.cambridgesavings.com/
- Mass DOER — Energy efficiency financing. https://www.mass.gov/info-details/financial-incentives-for-energy-efficiency
