Did you know you can raise the value of your property AND lower your utility bills at the same time? Apply for an FHA Energy Efficient Mortgage or FHA EEM, which gives you finds to upgrade the property to make it more energy efficient.

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FHA Energy Efficient Mortgages

When you're looking for a home to buy with an FHA loan, or want to refinance your existing FHA loan, one big issue is how much you need to set aside each month to make your FHA mortgage payments. Add utility bills to the mix and you'll soon be looking for any way to cut costs related to the upkeep of the home.

Did you know you can raise the value of your property AND lower your utility bills at the same time? Apply for an FHA Energy Efficient Mortgage or FHA EEM, which gives you finds to upgrade the property to make it more energy efficient. The results include lower utility bills and more equity in your home--you will definitely benefit from upgrading over the lifetime of your FHA loan.

WHAT DO I NEED TO QUALIFY FOR AN EEM?

The first step in the process is to get an FHA EEM is a report on the property's energy efficiency called the Home Energy Rating Systems report. This report is the result of a complete inspection of your home, carried out by a professional rater. The rater looks at everything from insulation to the type of appliances installed in the home. The rater will factor in how much money is spent on the property every month in its' current state and how efficiently it uses energy.

Once that is determined, the inspector makes recommendations on how the property should be upgraded and improved. Those recommendations include a cost estimate for the upgrades, plus the savings you'll get once upgrades are properly installed. The recommendation also includes information about how long the upgrades will last until they must be repaired or replaced.

WHAT ELSE SHOULD I KNOW ABOUT FHA EEM?

FHA mortgages have loan limits, but when it comes to FHA EEM loans, those limits don't prevent you from getting an EEM even if your current loan is right at the limit for your area. When applying for an FHA EEM, you are entitled to exceed the loan limit if the amount of the EEM loan pushes your loan total past that limit. FHA Energy Efficient Mortgages are approved for up to $4000, or 5% of the property value up to $8000. If you apply after your home has already been purchased, there is no re-qualification needed. You also don't need a new appraisal of the home.

If you are purchasing a home and want to include the FHA EEM, there is no larger down payment required to qualify for the EEM. If you are applying for an FHA 203(k) you can apply for the FHA Energy Efficient Mortgage in conjunction with the 203(k). In these cases the improvements are permitted to take place after the loan's closing date.