Although you might have heard the term Energy Efficient Mortgages (EEMs), many of us don’t know what they are. That’s unfortunate, because these programs could help many new homebuyers afford or create a more efficient and comfortable home that costs less to operate.
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Energy Improvement Mortgage (EIM)
An EIM allows borrowers to fold the cost of energy-efficiency improvements into the mortgage—without increasing the down payment. Borrowers can use the money they will save in utility bills to finance energy improvements.
Both EEMs and EIMs typically require a home energy rating to provide the lender with the estimated energy savings and the value of the energy-efficiency improvements—known as the Energy Savings Value. EEMs and EIMs are sponsored by federally insured mortgage programs such as the Federal Housing Administration (FHA) and Veterans Affairs (VA), as well as the conventional secondary mortgage market (Fannie Mae and Freddie Mac).
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