This is a topic I have been getting more and more inquiries on lately from customers and realtors alike. This product has been around for some time, but as things in the market continue to rapidly change it is nice to know there are some positive things happening for homeowners, or those who aspire to become homeowners.
The Energy Efficient Mortgage is a program designed to benefit borrowers who have homes that meet the Energy Efficient criteria or are interested in financing energy efficient updates into their new mortgage. Items such as insulation, windows and doors, and heating/cooling systems that meet energy efficient standards may actually benefit the potential homeowner in the purchase financing, as well as the obvious long term benefits in saving the homeowner's money through the valuable updates.
Additional allowances for downpayment, value or sales price, and income through the energy efficient program requirements may be available to benefit the borrower, as follows:
• The borrower's contribution to the down payment, closing costs, and/or prepaid items may be funded by energy efficiency rebates from a government agency, utility, or manufacturers
• The monthly energy savings from the Energy Report (and any residential energy efficiency tax credit to which the borrower is entitled) may be added to "other income" to help the borrower qualify for the loan program
• The sales price or value may be increased as permitted by the program requirements.
The updates are capped at 15% of the appraised value of the home. This can be a huge valuable asset to the consumer! Currently this program can be used in conjunction with the FHA mortgage program or Fannie Mae's My Community mortgage. Although this product is not available with all lenders at this time, it is beginning to roll out among the major mortgage lenders in the country so I expect more specific information will be forthcoming at which time I will update the blog on this topic.
Aaron Lazenby, Mortgage Professional
Affordable Home Funding, Inc