What is a Energy Efficient Mortgage? *FHA & VA Only*
In simple terms, An Energy Efficient Mortgage is financing improvements for your Home that is Energy Efficient. Becoming Energy Efficient reduces your monthly utility costs and can ultimately increase your home value.
Below are some examples of what to improve to become more Energy Efficient.
- Lighting
EEM increases to 5%
Previously, Energy Efficient Mortgages were capped at $4,000 or $8,000 in improvements, whichever was greater.
June 10 2009 HUD released the change to The maximum amount of the portion of the EEM for energy improvements is the lesser of 5% of:
• the value of the property, or
• 115% of the median area price of a single family dwelling, or
• 150% of the conforming Freddie Mac limit
So now you can make some great improvements to your home and go for a combo to get an additional tax credit on top of that!
Up to $1,500 Tax Credit for Energy Efficiency Improvements
Tax credits are now available for home improvements which must be "placed in service" from January 1, 2009 through December 31, 2010.
Most all Energy Efficient Improvements (Please Check with your Tax Advisor) will allow 30% of cost, up to $1,500 to be claimed as a Tax Credit.
The Ultimate Combo Example
So realistically you could get the following:
- Buy a home and repair all the windows by financing the repair cost in an Energy Efficient Mortgage.
- Get the $8,000 tax credit as a first time home buyer
- Get the $1,500 tax credit as an Energy Efficient Improvement
Total = $9,500 Tax Credit!!
How would you like that?
So take advantage of this great offer as most people don't realize it's still out there!!
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