Energy Efficient Mortgages

Energy Efficient Mortgages (EEM) are a 15 year old FHA product available to your clients. It seems they aren't used often out of lack of understanding and are really not much more difficult than a standard FHA loan. Today's market conditions mean home buyers are increasingly using FHA financing. If you have a client that is looking at an FHA product, or you work with FHA products regularly, have you considered offering an EEM to your client? An EEM can be used on either a home purchase or a refinance.

Energy Efficient Mortgages consist of testing a home to determine which energy improvements make economic sense if rolled into the financing of the home. These improvements can be windows, doors, HVAC, insulation, appliances, etc. that will result in a DECREASED monthly payment when incorporated into the primary financing. Not only will the monthly payment be less, aged systems can be replaced to offer your client peace of mind, and the home will no doubt be more comfortable as well.

The testing of the home is performed by a certified Home Energy Rater (www.natresnet.org). The rater computer models the home based on the test results and inspection of the existing conditions/systems. The modeling of the home determines the present value of energy improvements when amortized into the home financing. The improvements that pay for themselves can be financed in the mortgage.

Our most recent EEM certification resulted in:

1. $382 yearly savings in mortgage expense
2. Reducing the energy usage by 33%
3. A new high efficiency HVAC system
4. A new high efficiency tankless hot water heater
5. Reducing the air leakage (drafts) in the home by 30%
6. Repairing a poorly constructed return air system (it was pulling air from the attic)

Additional information on FHA Energy Efficient Mortgages can be found at: http://nhl.gov/offices/hsg/sfh/eem/eem_prog.cfm