FHA Energy Efficient Mortgage Program
Make Upgrades. Lower utility bills. Boost property values.
CREFCO helps you refinance with an Energy Efficient Mortgage.
Energy Efficient Mortgages – Guaranteed by Law to Save You Money
Given the current environmental and economic client, the U.S Government’s Energy Efficient Mortgage Program (EEM) recognized the significant dual benefit of having homeowners make energy efficient upgrades to their homes. That is;
Save homeowners money
Benefit the environment through reduced emissions
Because of this win-win scenario, the government now provides significant incentives for homeowners to make energy efficient upgrades through a popular mortgage program known as the FHA Energy Efficient Mortgage.
There are two types of energy efficient mortgages: An EEM Home Purchase Loan, and an EEM Streamline Refinance. Both loans function in a similar manner and are designed to help a homeowner save money.
The basis of the Energy Efficient Mortgage is this: reduced monthly energy bills produced by these improvements make it possible for homeowners to pay a slightly higher mortgage (the cost of the upgrades added to the principle), and still spend less money each month.
In fact, by law, an EEM is only granted when it’s proven that it will save you money each month.
Additional Benefits of an Energy Efficient Mortgage (or Refinance)
The FHA EEM program offers several significant benefits to homeowners. As discussed, the first is a guaranteed savings every month through reduced utility bills (offsetting a slightly higher mortgage principle), and possibly refinancing to a lower interest rates as well.
In other words, you can reduce your monthly energy costs and potentially reduce your monthly mortgage payments as well.
Additional benefits of an Energy efficient Mortgage include:
The ability to pay for energy efficient upgrades and home improvements over the life of the loan
Refinancing into a fixed rate mortgage — rates and payments will not increase over time
Higher property values
Environmental benefit / reduced emissions and energy usage
Energy Efficient Mortgage Requirements & Eligibility
An EEM functions just like any other FHA mortgage, except with two additional steps. The first is a home energy rating report from either a home energy rating system (HERS) or an energy consultant. This report will indicate the improvements to be made, estimates how much money you will save each month over, and shows that the cost of improvements is less than the present value of these savings.
The next step, is that the amount needed for the energy efficient improvements is simply rolled into the FHA home loan. You do not have to qualify for, or make a down payment, on this additional amount.
The eligibility requirements for an FHA energy efficient mortgage are the same as any standard FHA loan. However, only a 3% down payment is required in an FHA EEM Purchase Loan. There is no equity required if you already have an FHA mortgage and wish to perform an Energy Efficient Streamline Refinance.
Finally, the energy efficient improvements are made after the loan closes, which guarantees you’ll have the funds you need to make them.
How Do I Get Started?
Getting started is easy. Answer a few simple questions and we’ll set you up with an energy efficient mortgage expert who can guide you through the process.
Remember our application is fast, free, and easy, and an EEM is only performed if it’s proven to save you money!
(By refinancing your home loan, the finance charges you pay may be higher over the life of the loan.)