Home > Blogs > Erica Wright > Erica's Blog

Energy Efficient Mortgage Q&A

By Erica Wright

Mortgage and Lending with Platinum Real Estate Associates of RE/MAX Southern Realty

April 09, 2009 03:04 PM

Here are a few Q&A's about the Energy Efficient Mortgage. I just finished the NAR GREEN Designation class. I took even though I am not a REALTOR, I sure learned alot!

Q: How does the EEM benefit the borrower?

A: The EEM benefits the borrower in several ways. First, the estimated energy savings are added to the borrower's income to allow the home buyer to qualify for a larger total mortgage amount. Second, by increasing borrowing power, the EEM allows borrowers to include the costs of energy improvements into the total mortgage amount. 100% of the energy improvements, typically up to 15% of the value of the home, can be financed and paid for over the life of the mortgage, reserving the borrower's cash for more immediate, move-in costs. Third, the value of the home is adjusted by the value of the energy efficient improvements.
Q: How does a home qualify for the EEM?
A: Existing homes must have a RESNET accredited rating report to evaluate the home's energy efficiency in its current state or to identify opportunities for cost-efficient energy efficient upgrades.

If the home was newly constructed, the home can have a rating report. After completion, the home is evaluated with a home energy rating.
Q: What is a home energy rating?
A: The home energy rating is a standard measurement of the home's energy efficiency. An energy rating allows a home buyer to easily compare the energy costs for the homes being considered.

Home energy ratings involve an on-site inspection by a residential energy efficiency professional - a home energy rater. Home energy raters are trained and certified by a RESNET accredited home energy rating system.

The home energy rater inspects the home and measures its energy characteristics, such as insulation levels, window efficiency, wall-to-window ratios, the heating and cooling system efficiency, and the solar orientation of the home. Performance testing, such as a blower door test measuring door and duct leakage may be used. The home receives a point score between 1 and 100, depending on its relative efficiency. An estimate of the home's energy costs is also provided. A homeowner who wants to upgrade the energy efficiency can use the energy rating to evaluate and pinpoint specific, cost-effective improvements.

Like

0

Re-Blog

0