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Energy Efficient
Mortgage (EEM) Services
What Is An Energy Efficient
Mortgage?
Very simply, an EEM
is a mortgage where the cost of installing “cost effective” energy
improvements can be included in the total amount being financed (or
refinanced) in any HUD/FHA, VA, or Fannie Mae mortgage. Homebuyers
can generally finance from $3,000 to $8,000 worth of energy
improvements directly into their mortgage so long as a Home Energy
Rating System (HERS) Provider documents that the expected average
monthly energy savings will be greater than the small amount added
to the monthly mortgage payment to cover the $3,000 to $8,000 EEM.
In Maine, almost every home can gain significant energy savings from
just a few hundred to a few thousand dollars worth of “targeted”
energy improvements.
How You Can Benefit
From An Energy Efficient Mortgage (EEM)?
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They clearly
identify what the most cost effective energy improvements are
that can be made to your home.
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They allow you
to finance the cost of installing those energy improvements
directly into your mortgage package with all of the interest
rate and tax savings that you probably Will Not get by trying to
finance these improvements later. (such as when cold drafts
start blowing through the home or heating oil approaches $2.00
per gallon.)
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They can be
used for both existing homes and for new home construction
projects.
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If you need it
- Most EEM’s will allow you to stretch the standard amount that
you can borrow (or refinance) to include those energy
improvements.
Some of the Energy
Financing Programs in Place Today.
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The HUD/FHA
Energy Efficient Mortgage Program (EEM)
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The Veterans
Administration (VA) Energy Efficient Mortgage Program.
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The Fannie Mae
/ Freddie Mac (EEM) Programs.
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The EPA Energy
StarŪ Homes Program. (new construction)
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Plus - a
growing number of proposed state and federal energy efficiency
and energy tax credit programs.
Summary of the
HUD/FHA, VA, and Fannie Mae Energy Efficient Mortgage Programs.
The HUD/FHA Energy
Efficient Mortgage (EEM)
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Allows for the
greater of $4,000 or 5% of appraised value up to $8,000 added to
the mortgage for energy upgrades.
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For new or
refinanced mortgages.
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1-4 unit
properties are eligible.
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Both existing
homes and new home construction.
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Buyer qualifies
only for the original loan amount. No
additional credit qualifying is required.
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Allows for 2%
Debt-to-Income stretch.
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FHA maximum
limits for the area may be exceeded.
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No additional
cash requirements for the Buyer.
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No additional
appraisal requirements.
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90 days to
complete the energy improvements.
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Solar options
are allowable.
The Veterans
Administration Energy Efficient Mortgage (EEM)
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Allows for up
to $6,000 added to the mortgage for energy upgrades.
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For new or
refinanced mortgages.
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1-2 unit
properties are eligible.
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Both existing
homes and new home construction.
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Buyer qualifies
only for the original loan amount. No
additional credit qualifying is required.
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Maximum limits
for the area may not be exceeded.
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No additional
appraisal requirements.
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180 days to
complete energy improvements.
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Solar options
are allowable.
The Fannie Mae
Energy Efficient Mortgage (EEM)
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Allows for up
to 15% of adjusted value to be financed for energy upgrades.
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For new or
refinanced mortgages.
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1-4 unit owner
occupied properties are eligible.
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Both existing
homes and new home construction.
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Buyer qualifies
for total loan amount after adding upgrades.
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Fannie Mae
maximum loan limits may not be exceeded.
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There are
additional cash requirements for the Buyer.
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No additional
appraisal requirements. (Form 1224 only)
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120 days to
complete energy improvements.
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Solar options
are allowable.
For more information on these programs go to:
www.natresnet.org |
