Looking for ways to lower your energy bills and improve your home's efficiency and value? With an Energy Efficient Mortgage you can finance energy efficient improvements into your FHA home loan.
As energy costs continue to increase, more and more people today are looking for ways to save money on their energy bills. One way many homeowners and homebuyers are doing that is by improving the energy efficiency of their homes. The Energy Efficient Mortgage (EEM) is a great loan program for borrowers to finance energy efficient improvements into their FHA Home Loan for their principal residence. Borrowers can finance up to 100% of the cost-effective energy improvement as long as the present value of the energy saved, over the useful life of the improvements, is shown.
Benefits of the Energy Efficient Mortgage:
- Can finance up to 100% of the energy efficient improvements*
- May be used for all property types
- Available for purchase or refinance
- Can be used on new or existing homes
- May be used in conjunctions with the Streamline loan program
- Can be used for energy improvements such as:
- Upgrade Existing Windows
- Upgrade Existing Heating and Air Systems
- Upgrade Insulation
- Plus many many more energy efficient improvements
A qualified home energy rater must perform an analysis of the cost-effectiveness of the energy improvement using Home Energy Rating System (HERS) guidelines. The energy rater must provide the borrower and the lender with a written home energy rating report. This report will include an estimate of the current energy cost vs. the proposed energy costs with the improvements. Many home improvement stores have qualified home energy raters on staff. There are also a few home energy service networks with accredited home energy rater members, which can be found through an Internet search.
The fees charged to the borrower for the home energy rating, including the physical inspection, the HERS report, and any post-installation test, must be customary and reasonable for the area. These fees may be included and financed as part of the energy improvement upgrade if the entire package, including those fees, is cost-effective. If not, such fees are considered allowable closing costs.
In addition to the base FHA maximum mortgage amount limit, which is calculated on the value of the home, the mortgage loan amount for an EEM can be increased by the cost of effective energy improvements. The maximum amount of the cost of the energy efficient improvements is set out below.
The maximum amount of the portion of the EEM for energy improvements is the lesser of the actual cost of the improvements or 5% of the lesser of:
- FHA appraised value of the property as indicated by the appraised value, or
- 150% of the conforming Freddie Mac loan limit, or
- 115% of the median area price of a single family dwelling
Looking for ways to lower your energy bills and improve your home's efficiency and value? With an Energy Efficient Mortgage you can finance energy efficient improvements into your FHA home loan.
As energy costs continue to increase, more and more people today are looking for ways to save money on their energy bills. One way many homeowners and homebuyers are doing that is by improving the energy efficiency of their homes. The Energy Efficient Mortgage (EEM) is a great loan program for borrowers to finance energy efficient improvements into their FHA Home Loan for their principal residence. Borrowers can finance up to 100% of the cost-effective energy improvement as long as the present value of the energy saved, over the useful life of the improvements, is shown.
Benefits of the Energy Efficient Mortgage:
- Can finance up to 100% of the energy efficient improvements*
- May be used for all property types
- Available for purchase or refinance
- Can be used on new or existing homes
- May be used in conjunctions with the Streamline loan program
- Can be used for energy improvements such as:
- Upgrade Existing Windows
- Upgrade Existing Heating and Air Systems
- Upgrade Insulation
- Plus many many more energy efficient improvements
A qualified home energy rater must perform an analysis of the cost-effectiveness of the energy improvement using Home Energy Rating System (HERS) guidelines. The energy rater must provide the borrower and the lender with a written home energy rating report. This report will include an estimate of the current energy cost vs. the proposed energy costs with the improvements. Many home improvement stores have qualified home energy raters on staff. There are also a few home energy service networks with accredited home energy rater members, which can be found through an Internet search.
The fees charged to the borrower for the home energy rating, including the physical inspection, the HERS report, and any post-installation test, must be customary and reasonable for the area. These fees may be included and financed as part of the energy improvement upgrade if the entire package, including those fees, is cost-effective. If not, such fees are considered allowable closing costs.
In addition to the base FHA maximum mortgage amount limit, which is calculated on the value of the home, the mortgage loan amount for an EEM can be increased by the cost of effective energy improvements. The maximum amount of the cost of the energy efficient improvements is set out below.
The maximum amount of the portion of the EEM for energy improvements is the lesser of the actual cost of the improvements or 5% of the lesser of:
- FHA appraised value of the property as indicated by the appraised value, or
- 150% of the conforming Freddie Mac loan limit, or
- 115% of the median area price of a single family dwelling