Making Your Home Green with an Energy Efficient Mortgage
Are you looking to make your home a green home? If so, an Energy Efficient Mortgage may be just the solution for you!
In this video I am going to share what you need to know about Energy Efficient Mortgage Options.
An Energy Efficient Mortgage or EEM, can be used to buy a new home or refinance your existing home.
An EEM takes into account the cost savings that accrue to the homeowner as a result of lower utility bills. The value of utility savings is used by the lender to provide more favorable financing terms to the borrower, such as a better debt-to-income qualifying ratio that enables you to qualify for a larger loan amount and a better, more energy-efficient home.
To obtain an EEM you typically must have a home energy rater or other trained professional conduct a home energy assessment or rating before financing is approved. This assessment verifies for the lender that the home is energy-efficient or will be energy efficient after energy efficient improvements are completed and provides the lender with the estimated monthly energy savings and the value of the energy efficiency measures — known as the Energy Savings Value. EEMs are sponsored by federally insured mortgage programs (FHA and VA) and the conventional secondary mortgage market. Lenders can offer conventional EEMs, FHA EEMs, or VA EEMs.
CONVENTIONAL ENERGY EFFICIENT MORTGAGE
Conventional EEMs may increase your purchasing power when making energy efficient upgrades to your home at the time of purchase or refinance.
With Fannie Mae’s HomeStyle® Energy mortgage, you can make upgrades to reduce utility costs and improve the comfort and safety of your home by financing energy improvements directly in a purchase or refinance mortgage. Upgrades may also include solar, geothermal, or wind power.
FEDERAL HOUSING ADMINISTRATION (FHA) ENERGY EFFICIENT MORTGAGE PROGRAM
FHA’s Energy Efficient Mortgage program (EEM) allows you to save money on utility bills by financing energy efficient improvements with your FHA-insured mortgage. Under its EEM program, FHA insures the mortgage used to purchase or refinance a principal residence, and the cost of energy efficient improvements to be made on the home. You only need to qualify for the loan amount used to purchase or refinance a home and do not need to qualify for the portion of the loan to be used to finance the energy efficient improvements.
The energy efficient improvements that are financed must be cost-effective and can include the cost of materials, labor, inspections, and the cost of a home energy assessment by a qualified energy assessor.
VETERANS AFFAIRS ENERGY EFFICIENT MORTGAGE
The U.S. Department of Veterans Affairs (VA) EEM is available to qualified military personnel, reservists and veterans for energy improvements when purchasing an existing home.
A VA EEM is a fantastic way to finance improvements for your home, especially when used in conjunction with other VA loan products like a streamline refinance.
There are many updates you are eligible to make with the VA EEM, including:
Installing a solar water heater or insulating the current one
Adding solar panels
Weatherproofing additions such as caulking
Modifying furnace efficiency
Adding new insulation to walls, the ceiling, etc.
Installing a storm door or windows
There are also a few ineligible VA EEM home improvements you need to be aware of including:
Energy Star-rated appliances
A/C units
Vinyl siding
New roof or shingles
Whatever you want to do to make your home green, be sure to check with your mortgage lender and find out if combining an EEM with your mortgage may be a good option for you.
Thanks for watching.
Kevin Brierton
Sr Loan Consultant NMLS 599873
NMLS: 599873
Caliber Home Loans
(480) 553-8770
16430 N Scottsdale Rd Ste 170,
Scottsdale, Arizona 85260
Corporate NMLS: 15622
All loans are subject to credit approval. All rates and programs subject to change without notice. Other restrictions may apply. This advertisement is not a loan disclosure or commitment to provide a loan approval or a specific interest rate. This information is not intended to be an indication of loan qualification, loan approval or a commitment to lend. Other limitations may apply. Caliber Home Loans CHL NMLS #15622 EQUAL HOUSING LENDER
