Energy Efficient Mortgages
Conventional Energy Efficient Mortgages
Conventional EEMs increase the purchasing power of buying an energy efficient home by allowing the lender to increase the borrower's income by a dollar amount equal to the estimated energy savings. While Freddie Mac does not offer EEMS, they do allow underwriting flexibilities for energy efficient improvements with all of their offerings. Discuss this directly with your lender to find out more. To find a lender in your area, please visit the ENERGY STAR Partner Locator.
FHA Energy Efficient Mortgages
The mortgage loan amount for an FHA EEM can be increased by the cost of effective energy improvements. The maximum amount of the portion of the EEM for energy efficient improvements is the lesser of 5% of: the value of the property, or 115% of the median area price of a single family dwelling, or 150% of the conforming Freddie Mac limit.
For more information on FHA EEM loan limits refer to FHA Mortgagee Letter 2009-18 . No additional down payment is required, and the FHA loan limits won't interfere with the process of obtaining the EEM. FHA EEMs are available for site-built as well as for manufactured homes. Applications for an FHA EEM may be submitted to the local HUD Field Office through an FHA-approved lending institution. HUD has a searchable list of approved lenders. Information about the FHA EEM can be found on FHA's web site . Additional information is available from HUD's Office of Single Family Housing by calling (800) 569-4287. There is also a fact sheet about FHA's EEM (70KB). The Systems Building Research Alliance has information about FHA EEMs for ENERGY STAR certified manufactured homes.
VA Energy Efficient Mortgages
The Veteran's Administration (VA) EEM is available to qualified military personnel, reservists and veterans for energy improvements when purchasing an existing home. The VA EEM caps energy improvements at $3,000–$6,000. Borrowers should ask their lender about a VA EEM at the beginning of the lending process. More information about VA EEMs can be obtained from the website for the U.S. Department of Veteran's Affairs or by calling (800) 827-1000. Chapter 7 of VA Pamphlet 26-7 (Revised) (1.5MB) contains lender guidance on the VA EEM.
Additional Financing Information
To learn more about EEMs contact Fannie Mae, Freddie Mac, the FHA or the VA. Additional information about energy-efficient mortgages can be found on the websites for the U.S. Department of Housing and Urban Development (HUD) and the Residential Energy Services Network (RESNET) . More information on other energy efficiency financing opportunities for homebuyers and homeowners can be found on the U.S. Department of Energy's website.
Green Remodels
The Green Remodel path applies only to buildings for which the original building permit was issued prior to January 1, 1980. The Green Remodel Path has only three required elements:
1. Achieving a certain reduction in energy usage
2. Achieving a certain reduction in water usage
3. Complying with five mandatory indoor environmental quality practices
The reduction in energy and water consumption must range from a minimum of 20% for Bronze to at least 50% for Emerald-level certification. A qualified professional must audit or analyze the water and energy usage before and after the remodel. The same approach to the audit/analysis must be used for both the before and after the remodel. The remodeler should be sure to contract with the verifier to assess the condition of the building for the “before” energy and water analysis before the renovation begins. The verification progress will require a very brief inspection to verify the indoor environmental quality practices, along with a review of the energy and water analysis. The Green Remodel can be used for renovations that include an addition, but if the addition is significant in size, it may be difficult to meet the energy and water reduction thresholds.
Conventional Energy Efficient Mortgages
Conventional EEMs increase the purchasing power of buying an energy efficient home by allowing the lender to increase the borrower's income by a dollar amount equal to the estimated energy savings. While Freddie Mac does not offer EEMS, they do allow underwriting flexibilities for energy efficient improvements with all of their offerings. Discuss this directly with your lender to find out more. To find a lender in your area, please visit the ENERGY STAR Partner Locator.
FHA Energy Efficient Mortgages
The mortgage loan amount for an FHA EEM can be increased by the cost of effective energy improvements. The maximum amount of the portion of the EEM for energy efficient improvements is the lesser of 5% of: the value of the property, or 115% of the median area price of a single family dwelling, or 150% of the conforming Freddie Mac limit.
For more information on FHA EEM loan limits refer to FHA Mortgagee Letter 2009-18 . No additional down payment is required, and the FHA loan limits won't interfere with the process of obtaining the EEM. FHA EEMs are available for site-built as well as for manufactured homes. Applications for an FHA EEM may be submitted to the local HUD Field Office through an FHA-approved lending institution. HUD has a searchable list of approved lenders. Information about the FHA EEM can be found on FHA's web site . Additional information is available from HUD's Office of Single Family Housing by calling (800) 569-4287. There is also a fact sheet about FHA's EEM (70KB). The Systems Building Research Alliance has information about FHA EEMs for ENERGY STAR certified manufactured homes.
VA Energy Efficient Mortgages
The Veteran's Administration (VA) EEM is available to qualified military personnel, reservists and veterans for energy improvements when purchasing an existing home. The VA EEM caps energy improvements at $3,000–$6,000. Borrowers should ask their lender about a VA EEM at the beginning of the lending process. More information about VA EEMs can be obtained from the website for the U.S. Department of Veteran's Affairs or by calling (800) 827-1000. Chapter 7 of VA Pamphlet 26-7 (Revised) (1.5MB) contains lender guidance on the VA EEM.
Additional Financing Information
To learn more about EEMs contact Fannie Mae, Freddie Mac, the FHA or the VA. Additional information about energy-efficient mortgages can be found on the websites for the U.S. Department of Housing and Urban Development (HUD) and the Residential Energy Services Network (RESNET) . More information on other energy efficiency financing opportunities for homebuyers and homeowners can be found on the U.S. Department of Energy's website.
Green Remodels
The Green Remodel path applies only to buildings for which the original building permit was issued prior to January 1, 1980. The Green Remodel Path has only three required elements:
1. Achieving a certain reduction in energy usage
2. Achieving a certain reduction in water usage
3. Complying with five mandatory indoor environmental quality practices
The reduction in energy and water consumption must range from a minimum of 20% for Bronze to at least 50% for Emerald-level certification. A qualified professional must audit or analyze the water and energy usage before and after the remodel. The same approach to the audit/analysis must be used for both the before and after the remodel. The remodeler should be sure to contract with the verifier to assess the condition of the building for the “before” energy and water analysis before the renovation begins. The verification progress will require a very brief inspection to verify the indoor environmental quality practices, along with a review of the energy and water analysis. The Green Remodel can be used for renovations that include an addition, but if the addition is significant in size, it may be difficult to meet the energy and water reduction thresholds.