U.S. Dept. of Housing and Urban Development reclassifies wood pellet boilers as primary heating source, qualifying them for FHA funding; wood pellet sector in oil-dependent Maine set to benefit

Audrey Dixon

LOS ANGELES , March 7, 2012 (Industry Intelligence) –

The U.S. has reclassified wood pellet boilers as a conventional heating source, qualifying them for Federal Housing Authority (FHA) funding in a move expected to boost the sector's growth, particularly in Maine, Biomass Power & Thermal reported March 6.

Sen. Susan Collins, R-Maine, who asked the Dept. of Housing and Urban Development (HUD) to review the matter, said HUD had been slow to consider wood pellet boilers acceptable for a primary source of heat.

High oil prices and cutbacks in fuel assistance for low-income residents drove up costs for Maine residents, and Collins said that, with the reclassification, Maine families can convert to wood without losing their eligibility for FHA funding and federal housing programs.

The state is the most dependent on home heating oil in the U.S., and high oil prices caused many residents to look to wood pellet boilers, said Collins. As a result the industry is growing rapidly in Maine, Biomass Power & Thermal reported.

The wood pellet industry can also potentially “create thousands of new jobs” in Maine, said Collins, who noted that Maine has the country's oldest housing, which is often poorly insulated.

HUD Secretary Shawn Donovan announced March 1 that the boilers had been reclassified as a primary heat source, Biomass Power & Thermal reported.

Donovan said HUD is updating its guidelines to reflect the decision to reclassify wood pellet boilers, noting that government agencies often lag behind the newest edge of technology, Biomass Power & Thermal reported.

HUD has informed its lenders that qualifying wood pellet stoves are an acceptable heating system for homes under HUD’s insurance programs, Donovan said.

The primary source of this article is Biomass Power & Thermal, Grand Forks, North Dakota, March 6, 2012.

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