Climate change is causing governments around the world to think of new ways to reduce emissions. In the US, housing incentives are becoming popular among homeowners. This article will go over one of the best ways you can help finance efficiency upgrades to your home, save on monthly utility bills and more.<\/p>\n
Energy Efficient Mortgages (EEM) allows you to increase the amount of money you can borrow when you invest in efficiency improvements to your home. For those who qualify, you can combine the cost of these improvements with your monthly mortgage cost.<\/p>\n
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There are a few different ways to use an EEM: labor, equipment, inspections, and solar and wind technologies qualify as home efficiency improvements. EEMs are basically an add-on program that increases the amount you can borrow from a lender.<\/p>\n
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For new home buyers, an EEM can help you afford a more expensive home. So you don\u2019t even need to be a current home-buyer to take advantage of an EEM. Lenders will take into account the lower monthly utility costs of an energy-efficient home, meaning you can afford a higher monthly mortgage payment.<\/p>\n
There are three types of loans that work alongside an EEM: a conventional loan,\u00a0 FHA, or VA loan. A conventional loan is a mortgage not supported or insured by a government agency. FHA loans are insured by the Federal Housing Authority, and the VA loan is insured by the US Department of Veterans Affairs.<\/p>\n
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The most common conventional loans are offered by Fannie Mae and Freddie Mac. Although both of these loans are similar, there are a few differences. Let\u2019s take a closer look at some of these differences.<\/p>\n
The first basic difference between Fannie Mae and Freddie Mac loans is the maximum amount for energy and water improvements without a report or inspection. Fannie Mae\u2019s maximum amount is $3,500, and Freddie Mac\u2019s is $6,500.<\/p>\n
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Fannie Mae\u2019s EEM is called a HomeStyle Energy Mortgage<\/a>. Fanne Mae makes anyone interested in this loan get an energy assessment done by a Home Energy Rating System. The HomeStyle Energy Mortgage includes weatherization improvements like air and duct sealing, insulation, window and door replacements.<\/p>\n <\/p>\n Freddie Mac\u2019s EEM is called GreenChoice Mortgage<\/a>. Like Fannie Mae\u2019s EEM, Freddie Mac also requires you to get an energy assessment. However, the total cost of improvements to skip the energy assessment is $6,500. So it\u2019s a higher threshold to reach compared to Fannie Mae\u2019s EEM.<\/p>\n <\/p>\n Even though you can skip these energy assessments, it\u2019s a good idea not to because you can find out the most affordable areas of your house that you can make improvements. Both Fannie Mae and Freddie Mac allow you to combine the costs of energy inspections and updates into your purchase mortgage.<\/p>\n Take advantage of government incentives that will help make your current or future house more energy efficient. It doesn’t take a lot of extra work and you could help lower your monthly utility costs as well.<\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Climate change is causing governments around the world to think of new ways to reduce emissions. In the US, housing incentives are becoming popular among homeowners. This article will go over one of the best ways you can help finance… Continue Reading Greener Living<\/h1>\n