5% ERC Loan Program

Southwest Arkansas Electric REA's Energy Resources Conservation (ERC) Loan Program provides low cost financing for high efficiency heat pumps and other energy conservation improvements needed to make your home energy efficient.

With approved credit and completion of the home survey, REA will loan up to $5,000 per member per residential structure at 5% interest for up to 84 months. These loans are to finance energy conservation measures including heat pumps (including water source), caulking, weather stripping, insulation, storm or thermal doors and windows, etc. Loans for more than $5,000 will need Board of Director approval. Loans, which do not include a heat pump, will be limited to $3,000.

To qualify, all conservation measures must save enough energy within 10 years to pay for the improvements. The Cooperative's Home Survey determines payback estimates. Because loan funds are limited, loans will be made on a first come, first served basis.


To qualify for the loan you must have a good credit history with Southwest Arkansas Electric Cooperative and a good national credit rating. A three-member loan committee will check the member's credit before approving the loan. Loans will only be made for existing homes or buildings. The program is not for homes under construction. Also, you must own the property being improved.

The cooling capacity of the heat pump should not exceed 125% of the calculated design load. The heat pump must also meet minimum efficiency ratings to qualify. The SEER rating must be 12.0 or above and the HSPF must be 7.0 or higher. For package systems the SEER rating must be at least 9.5 and the HSPF must be at least 6.60. All duct work, including all supply and return air duct work, must be installed with a minimum of 2" duct insulation or rigid fiberglass board and must be sized properly for noise reduction and air flow.

Home Survey

Before a loan can be made, a home energy survey must be completed. This is a questionnaire concerning your existing and proposed energy efficiency.

Contact Your Dealer

We advise, but do not require, you to contact more than one qualified dealer or contractor for cost estimates to install a heat pump and making other improvements, such as storm windows or insulation if they are advised. To qualify for the ERC Loan, a member of the Arkansas HVACR Association must install the unit.

Submit Application For ERC Loan

Your application will be submitted to our load committee for consideration and we will notify you in writing of their decision. Once your credit is approved we will need a copy of your property deed. A copy of your deed is required for proof of ownership and a legal description. To secure the load, a lien will be filed on the improvements financed.

Processing Loan Documents

After the work is completed, please schedule a final inspection of the work with our office. If you have not already done so at that time, please furnish a copy of your deed and any bills or receipts so that loan papers can be completed for your signature. Once the loan papers are completed we will make an appointment with you to come to our Texarkana office to sign the loan papers and have them notarized. All checks will be two party checks made out to both you and the contractor or contractors.

Note: Cost of equipment and installation are to be negotiated between you and your contractor. You will be responsible for getting the invoices to us for processing and for making payment to your contractor. A two party check will be written to both you and the dealer. Sign the check only after work is completed.