What is an Energy Efficient Mortgage (EEM)?
An EEM is a loan made in conjunction with an FHA or VA purchase loan for a new construction home as well as for any pre-existing property. It can also be used with a refinance loan secured by that property to add energy-efficient improvements.
As a member of Green Home Realty in San Antonio, TX, I am thrilled to introduce all my customers and clients to this amazing product, which will help them to make their homes more energy efficient, and even save on those utility bills.
The EEM program allows a borrower to finance 100 percent of the expense of a cost-effective energy package.* A cost-effective energy package is one where the cost of the improvements, including maintenance, is less than the present value of the energy saved over the useful life of those improvements.
*This summary is based on a $200,000 loan amount, on a loan term of 360 months, with an interest rate of 4.25%, and an annual percentage rate of 4.458%.
The present value test is a statutory requirement and, thus, actual energy savings cannot be used to determine cost effectiveness in lieu of the present value calculation of the energy savings.
Some modifications that are included but not limited to the EEM program are as follows:
Solar electric systems Caulking and weather stripping
Furnace efficiency modifications Clock thermostats
New or additional insulation Water heater insulation
Storm windows and/or doors Heat pumps
Vapor barriers
Call Me Today at 210-789-4216, and I will be glad to recommend one of my preferred lenders who offer the Energy Efficient Mortgage Package for your purchase of a new construction or pre-existing home.
(Information provided by Prime Lending, a Plains Capital Company)
Comments(30)