A furnace in the attic?

Most newer 2-story colonial homes have 2 heating/cooling units with the upstairs unit being installed in the attic. This saves the builder money because air ducts and returns can be kept short and the installation of the ducts is simple. However, it can cost the home owner in the long term – in the form of lost heat through leaky and poorly insulated ducts. The more returns the builder installs (e.g. from individual rooms as opposed to only one central return), the less drafty the upstairs will feel in the winter, because doors can be kept closed and air will not be blown from one room into another. On the other hand, more holes in the ceiling mean more insulation faults and more energy loss.

Also, since it is not possible to install a humidifier in the attic, and dry air can make a home very uncomfortable during cold periods, a furnace in the attic should be avoided.

If you can, get both units, or a single, larger unit installed in the basement. One unit is more efficient than two, but provides less flexibility. The contractor will have to find a way to run the ducts through the first floor. You will lose a small amount of living space on the first floor, but the savings will be substantial in the long run. Because the heat ducts and returns run through the inside of the home (as opposed to unheated attic space), there is no loss at all from insulation faults in ducts (but there should still be insulation!). Because duct runs overall will be longer, your contractor will probably balk at this unorthodox idea (but remember, you are the person who will be paying the heating bill). The attic insulation will perform much better, because it will be continuous and uninterrupted by heat ducts and returns that inevitably cause losses. A humidifier can be installed without complications. If you need two independent zones, it is still a better choice to install both furnaces in the basement.