Energy Efficient Mortgage - Got Solar?

Energy Efficient Mortgage - Got Solar?

The planet is going greener and greener every day, and home building is no exception.  In our neighborhood alone in Evergreen, Colorado, there are three homes within our block with solar power.  We have been thinking about retrofitting our home as well. 

But the problem is, how can an avergage middle-class family afford an expensive retrofit solar system?  These setups can cost upwards of $30,000 for an average sized, 2500 square foot home. 

This is where the energy efficient mortgage can help.

The energy efficient mortgage is a program that allows home owners to refinance their home and roll in the cost of energy efficient improvements.  Solar is not the only thing that can be financed.  Insulation, windows, and heating and cooling systems are just a few more examples of items that can be included in an energy efficient mortgage.  This program can also be used on a home purchase.

The general rule for an energy efficient mortgage is that the monthly payment for the dollar amount of energy efficient improvements that are financed into the mortgage (not the full mortgage payment, just the financed EEM amount) must be less than or equal to the monthly savings resulting from the improvements. 

This is determined by a HERS report which is essentially a before and after report that will summarize the energy savings you will realize from making the improvements.  The report will project an estimated monthly savings due to the improvements based on historic energy bills on your home, and the efficiency of the systems you will be installing.

And that's not all.  Most energy efficient improvements will qualify for a tax deduction, some of them being hefty.  One family we helped with a solar installation this fall installed a $28,000 solar system for only $12,800 because of rebates and tax incentives!  They are "off the grid" now permanently, and will recover the cost in an estimated 7 years.

The energy efficient mortgage also has advantages because borrowers can qualify for a higher loan amount with less stringent qualifying factors.

If you have questions about the energy efficient mortgage I would be happy to help!