Energy Efficient Mortgage Helps Home Buyers Do Green Remodel

by Linda Lenore on November 13, 2011



This last week I've had the opportunity to educate several real estate agents, mortgage brokers, business coaches helping their clients find a way to "set themselves apart from their competition" and home buyers about the Energy Efficient Mortgage, a mortgage designed to help homebuyers afford the costs to do green remodel projects, thus improving the energy efficiency of their newly purchased home. Since I'm not a mortgage broker, please talk with a professional to find out all the information and regulations pertaining to this program.

Here are a few things I have shared with people who have shown interest the last few days in the Energy Efficient Mortgage (EEM). Although some people think this new loan makes the close of escrow take longer, I was told it doesn't when I took the Certified Green Real Estate Professional training last month. The thing to do is have your team onboard when you first start the escrow. One of your team members will need to be a Certified HERS Rater to perform the testing and energy audit.

The EEM is a loan program that recognizes the benefits of energy efficiency for a home and the home owner. As part of an FHA loan package, energy efficient home improvements performed by a licensed contractor can cut the energy costs of a home.

The loan is a separate amount from the regular FHA mortgage. It is an amount "in addition to" the FHA loan and can only be acquired through testing by a HERS Rater. This testing must show the improvements will reduce "the true cost of homeownership" through the reduction of energy consumption. Cost effective energy efficiency improvements - like new furnaces, Energy Star appliances, insulation of walls, ceilings and floors - can drastically lower the cost of utilities. This in turn creates more disposable income for a homeowner right away.

The amount of the loans vary according to many factors. As of 2009 there were no caps on the amount of the loan and may be up to 5% of the homes appraised value.

If you are considering a new home or if you are a real estate professional wanting to utilize green remodel as part of the plan for an older home needing energy efficient upgrades, the EEM financing my just the ticket to help.

Also there are rebates and other incentives throughout California, like Energy Upgrade California, that can help reduce the bottom line costs to make homes more energy efficient and comfortable for the homeowners.

Doing a green remodel can be one of the wisest investments you can make to a home from a dollars and sense perspective. Sometimes it can be confusing with all the possibilities. Comfort, reduced operating costs and a healthier environment are the benefits most of my clients are striving to achieve.

I love to work with my clients to figure out just what their wants and needs are. Then we find a way to integrate as many of them as is feasible into the project. It's a fun, fascinating aspect of the Green Feng Shui part of my company Green Chi Designs.

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