Alaina Moglia, ERS, for Zondits
Energy efficient mortgages, or EEMs, have made living efficiently and more comfortably easier than ever. EEMs allow energy efficient improvements to be financed with an FHA-insured mortgage. And lower energy costs make homes more affordable, which allows homeowners to allocate more money to a monthly mortgage payment.
There are two options for an EEM. The first is to make energy-saving improvements that are cost-effective and financed as part of the mortgage. The other is to make an older home more energy efficient with renovations, which can also make that older home more comfortable and affordable.
Buyers, sellers, and remodelers/refinancers can all benefit from an EEM. Buyers can qualify for a larger loan on a better, more comfortable home while saving money immediately and increasing the potential resale value of their home. Sellers are always looking to make their home stand out in the market, and what better way than to sell an energy efficient home that will save buyers money every month? Remodelers and refinancers also benefit from an EEM – all the benefits of an EEM loan are accessible without having to move because renovations save money and increase the potential resale value of the home.
There is a three-step process to receive an EEM. First there needs to be a home energy assessment where a qualified energy rater/assessor comes to the home and finds possible energy efficiency upgrades. The upgrades must be cost-effective and must pay for themselves over their expected life-span. The second step is for the borrower to determine the energy package by choosing which improvements to make based on the recommendations of the analysis. And, finally, the EEM loan is issued and the borrowers can move into or renovate their new energy efficient home!
Even though energy efficient homes have an initial larger price tag than non-efficient homes, they are less expensive to own and operate. Lenders have recognized this and will allow larger loans for these types of energy efficient upgrades. You can live more comfortably and affordably while owning an energy efficient home.
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