EEM

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EEM : Energy Efficient Mortgage

Buyers qualify for a larger loan on a better home, purchase a more comfortable home, save money from Day One and they increase the potential resale value of the home.
Sellers move the home quickly, make the home more affordable to more buyers and attract attention in a competitive market.
Remodelers benefit without moving, the improvements will save them money and increase the potential resale value of the home.

Pay for energy improvements easily, through your mortgage. Your lender can increase your loan to cover energy improvement costs. Monthly mortgage payments increase slightly, but you actually save money because your energy bills will be lower!

Energy Efficient Mortgage Loan How it works…

Began as a pilot in 1992 and became a national program 1995
EEM can be used with Section 203(b) and 203(k) loans
Total cost of the improvements is less than the total present value of the energy saved over the useful life of the energy improvement

Savings is determined by a HERS Rater – Home Energy Rating System Rater or qualified energy consultant

Energy savings are represented in a “Monthly Savings Report” produced by energy modeling software
Tested and rated on a scale of 1 – 100 (100 = 2000 IECC) – Called HERS Index
Recommeded cost-effective energy upgrades
Estimates of the cost, annual savings and useful life of the upgrades
Improved Rating Index – after installation
Estimated annual total energy savings before and after the upgrades

The cost of the HERS report and inspections may be rolled into the cost of repairs

Cost of improvements must be the lesser of 5% of:

The value of the property, or

115% of the median area price of a single family dwelling, or

150% of the conforming Freddie Mac limit.

Lender will place repair funds in an escrow account to be released after an inspection verifies that the improvements are installed and the energy savings will be achieved

EEM can be added to the $35,000 Streamlined K limit

By lowering the cost to operate the home, the borrower’s debt to income ratio can be stretched; thereby allowing a borrower to buy more home