Energy Efficient Mortgages Series :
Energy Efficient Mortgages – EEM loans – Part 1 of 2 – FHA loans going ‘Green’
Energy Efficient Mortgages – EEM loans – Part 2 of 2 – VA loans going ‘Green’
Energy Efficient Mortgages – EEM loans – Part 2 – VA loans going ‘GREEN’
Jeff Belonger wrote about a mortgage product that is little known last week. Here's part II of the Energy Efficient Mortgage program that is available:
VA loans can be an excellent way to purchase your new home if qualified. But what if you could save even more money by decreasing your utility bills. With VA energy efficient mortgages, this certainly can happen. Congress started a pilot program in 1992 demonstrating the use of energy efficient mortgages, known as EEM’s. And the Veterans Administration added this to their arsenal of VA loans.
Energy efficient loans can be very effective, unless you are having an energy efficient home built. If you have an older home, it probably won’t be up to current standards, which could cost you hundreds of dollars monthly.
How does the Energy Efficient Mortgage program work for VA loans?
The Veteran can increase their loan by up to $6,000 in energy costs without the approval by the VA, as long as the lender thinks the improvements are reasonable. If the costs are over $6,000, it must be supported by an increased valuation in an equal amount. Here are the different levels of increases.
Directly from the VA handbook, the mortgage may be increased :
- up to $3,000 based solely on the documented costs
- up to $6,000 provided the increase in monthly mortgage payment does not exceed the likely reduction in monthly utility costs, or
- more than $6,000 subject to a value determination by the VA.
The buyer may wish to contact a person or a firm to show such energy improvements. As I mentioned in my FHA post, you can also contact your local utility company for these services.
Here is the list of Acceptable energy efficient improvements, but are not limited to : Acceptable energy efficient improvements list
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For more information on FHA loans, please go to this link. The FHA Expert
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Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc
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