I am frequently asked about the FHA Energy Efficient Mortgage Program by buyers seeking to purchase homes in need of energy efficient upgrades. This programs allows buyers to finance the cost of energy efficient improvements through the mortgage loan. The buyer's loan can be increased according to EEM guidelines to cover energy improvement costs. Monthly mortgage payments increase slightly, but the buyer generally will save money on a monthly basis over the term of ownership of the home because energy bills (power / gas) are decreased...
A buyer can borrow up to 5% of the value of the property (not to exceed $8,000) above and beyond the contract purchase price of the home. Generally, FHA loan limits can be exceeded to accommodate an EEM, there is no additional downpayment required on the amount above the original contract purchase price, and there are no addition appraisal requirements.
So what types of improvements can a buyer make via the Energy Efficient Mortgage? A few examples;
-Replace a central heat & air system
-Add insulation
-Install dual pane windows
-Replace a water heater
If you would like to find out more information about the EEM and get pre-approved for your loan, you can contact Marlena Olson with the Vitek Mortgage Group at 916-486-6931.
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