There’s nonstop mortgage talk in the media nowadays (including our own Mortgage Minute updates), but an often overlooked option could increase the amount you can borrow while making your home more environmentally friendly.
According to CNET, Energy Efficient Mortgages (or EEMs) expand the amount you can borrow when you invest in efficiency upgrades. Qualified applicants can combine the cost of such improvements into monthly mortgage payments, which can also, in turn, lower energy and utility bills.
Projects that may qualify include an efficiency audit as well as labor, equipment, inspections and active and passive solar and wind technologies, per CNET.
Unlike rebates and tax incentives, EEMs provide the cash prior to even purchasing a home. And they are typically available through conventional, FHA loan or VA loans.
The size and cost of the proposed efficiency upgrades will lead applicants down a variety of different EEM loan options with varying thresholds. And while resources for energy-efficiency incentives can vary by state (talk with your lender; and check out HUD’s info on home ratings for energy efficient mortgages in California here), experts agree that it is recommended the would-be homebuyers get an energy assessment to find out the most effective ways to improve your home’s energy efficiency. Should you go with an EEM loan, the costs of these assessments and the energy-efficient updates that will be done to the house are then incorporated into the purchase EEM.
For more information from CNET, click here.