Energy Efficient Mortgage (EEM)

Energy Efficient Mortgage (EEM) program is designed to save money on utility bills by financing the cost of new energy efficiency improvement for new or existing homes as part of the FHA-insured or VA-guaranteed home purchase or refinance mortgage.

The Energy Efficient Mortgage program is designed to recognize the cost-effective energy savings of a home with improvements. If the home is energy efficient, the home owner will save on utility costs and devote more income towards mortgage payments.

You can get up to $8000 with FHA and up to $6000 with VA towards energy efficient improvements. Under the FHA or VA Energy Efficient Mortgage program a borrower can finance 100% of the cost of energy-efficient improvements into the mortgage. The financed amount cannot exceed the limits set by the program; up to $8000 with FHA and up to $6000 with VA. And, no appraisal of the energy-efficient improvements is required.

To be eligible for this mortgage program, the improvements must be cost-effective. This means that the cost of improvements (including cost of maintenance) must be less than present value of savings over the useful life of the improvements. The new mortgage would include the cost of energy efficient improvements.

The borrower does not have to qualify for the additional money and does not make a down payment on it. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, or savings and loan association, and the mortgage is insured by HUD for FHA loans and guaranteed by Veteran Affairs for VA loans.

EEM Program Eligibility

All persons who meet the income requirements for FHA's standard Section 203(b) insurance or for a VA loan and can make the monthly mortgage payments are eligible to apply. The cost of improvements and estimate of energy savings must be determined by an energy consultant using a Home Energy Rating System (HERS).

EEM Program Benefits

Cost-effective energy-saving measures may be financed as part of the mortgage
Stretch debt-to-income and qualify for a larger loan amount
Buy a better, more energy efficient home

Buyers:

Qualify for a larger loan on a better home
Get a more comfortable home NOW
Save money every month from Day One
Increase the potential resale value of your home

Sellers:

Sell your home more quickly
Make your house affordable to more people
Attract attention in a competitive market

Remodeling / Refinancing:

You can get EEM benefits without having to move
You can make improvements that will save you money
You will increase the resale value of your home

You can pay for your energy improvements easily via your mortgage. Your loan and mortgage payments will increase slightly to cover the energy improvement costs. However, you will save money each month due to your reduced energy bills.

Today's Rates:

Mtg Loan

Rate

APR

30-yr Fixed	4.97%	5.13%
15-yr Fixed	4.33%	4.56%
1-yr Adj	4.27%	5.3%

* national averages