The Housing Group Fund, small-scale local builders, remodeled the house, and SMUD turned it into a energy efficient model demonstration project.It’s a tiny piece of the $3.9 billion federal Neighborhood Stabilization Plan that sent $32 million to Sacramento County earlier this year.

The Sacramento Housing and Redevelopment Agency contributed $86,000 from the allocation to bring back a house nearly destroyed on its way to foreclosure. Said Diana Tate at a ribbon cutting marking the accomplishment Thursday: “It’s been a long time coming.”

In another moving scene, husband Ken said they’d looked at houses for a year.  ”We finally finished the race,” he said.

Here’s a look at the ribbon cutting held in their front yard:

Jim Bayless bought the 1983 ranch-style home on the brink of foreclosure last May and spent about $42,000 for energy efficiency improvements. “This house is more efficient than most new homes being built today,” he said.

Bayless works with a company called GreenBuilt, which specializes in energy improvements in older homes. SMUD offered Bayless incentives to create a demonstration home to show other homeowners how to do the same thing.

SMUD Project Manager Mike Keesee said the wave of foreclosures in the Sacramento area offers an opportunity to upgrade thousands of older homes that would be remodeled anyway.

“If you built (energy improvements) into a 30-year mortgage, we estimate you could be cash positive from day one,” Keesee said.

Energy improvements on Bayless’ home include new insulation in the attic and one outer wall, solar hot water, solar electric panels, a heat pump for the electric water heater, retractable window shades, and a rooftop solar tube to provide natural lighting indoors.

Bayless expects the annual $3,000 SMUD bill to drop to $1,000.

The demonstration house is located at 8901 Quail Hill Way in Fair Oaks and will be open to the public Saturday Oct. 24 from 11 a.m. to 3 p.m.