If you have a budget, the 1500 series furnaces by usstove would heat your house just fine. Alot of people say their cheap, but there made out of 7 gauge steel, firebrick lined and they do the job. We heated with one for 25 years. Some furnaces are made out of 10 gauge steel, so I would watch for that. Also like said the englander would also do the job. As far as the Caddy, we heat a 2400 square foot victorian with 10' ceilings and our basement stays warm from the radiant heat, which is 1200 square feet. We averaged 70-72 this winter with ours, and our house isn't too tight. We have some high heat loss areas that need to be addressed, so it would do the job. You can get them shipped for 2900 with the blower. They are setup just like a furnace. You can also add electric heat or an oil-burner for a multi fuel furnace if you wanted to. As far as the tax credit goes I believe it only applies if you are replacing a furnace with a new one. I would check into that, you may not be eligible. Shop around, and compare. Buying a lower line furnace will heat just fine, but it will use more wood than a furnace with secondary combustion. There are alot of choices out there.