Energy Efficiency in Homes

By George Scott

 Building energy efficient homes and improving energy efficiency in our homes can increase their value.

Over the past few years, there has been a ground swell of Green building interest by home buyers and builders. In response to the growing demand to conserve energy in our homes, there are several new mortgage programs that allow home buyers to finance the cost of energy improvements into their mortgage, to increase their loan-to-value, or improve their qualifying ratios. Some of the more common improvements that are used to make homes more energy efficient include the addition of new windows, high efficiency heating/cooling systems, and improved insulation. All of these contribute to reduced energy use, and also to making homes quieter, more comfortable, and more desirable. 
Mortgage Programs 
These programs allow buyers to purchase a more expensive home that has a lower cost of ownership to offset the larger mortgage payment. There are 2 types of financing options available that cover a variety of scenarios for energy efficient homes.

o Energy Efficient Mortgages (EEM's) allow borrowers to qualify for a larger loan, using expanded income ratios, sometimes with the same down payment.

o Energy Improvement Mortgages (EIM's) allow borrowers to include in the mortgage the cost of making an existing home more energy efficient, when they refinance or purchase the home. 
These products are available through your local mortgage brokers and banks using FNMA, FHLMC, FHA, and VA guidelines.