March 2019

Energy-Efficient Mortgage (EEM) Benefits

Energy-Efficient Mortgage (EEM) Benefits

Energy-Efficient Mortgage (EEM) Benefits

An EEM is designed to make it financially possible for you to have a more environmentally friendly home. When purchasing a new home or refinancing your current home, you can apply for an EEM in order to be able to afford green upgrades to your home or to be able to afford to buy an environmentally friendly home. These types of upgrades often have high costs upfront but will save you money over the time in lower energy bills and reduced maintenance costs. It also makes your home a better investment. These home improvements will not only improve your carbon footprint, but they will benefit your bank account as well. 

An EEM is a separate loan that is combined with your mortgage. This low down payment loan option is backed by the FHA, the VA, and Fannie Mae or Freddy Mac. This loan allows you to save money and live in a more comfortable home. The interest on this type of loan is tax-deductible. If you’re buying a home with this loan, it allows you to start saving money on your energy bills right away.

Types of green home improvements: 

  • Updated insulation
  • High-efficiency furnace or air conditioning
  • Energy efficiency kitchen appliances
  • Double-paned windows
  • Tankless water heaters 
  • Air duct repairs

Energy Efficient Mortgage Eligibility

In order to borrow money for an EEM, you will need to have a home inspection from an approved auditor. This assessment will help you identify home improvements, estimate the savings associated with the projects or the Energy Savings Value, and identify the associated costs. Your home will then be given a score on a scale from 0 to 150. You’ll want to have this inspection happen early on in the process while your loan is being processed. If you have qualified for a loan, you also qualify for an EEM. 

It’s important to know that on this type of mortgage, the lender uses your home as collateral and has the possiblity of repossessing your home. This also means, however, that the bank is assuming less risk and therefore may be able to provide you with a lower interest rate than you may find with a different type of loan.

To get a personalized rate quote in under a minute click here.

Was this article helpful?

Related posts
[Get A Rate Video] What Is Home?
July 2015
[Get A Rate Video] What Is Home?

https://www.youtube.com/watch?v=kk2H8lcxgrk&ab_channel=GetARate At Get A Rate, we believe ...

Tools
A New & Better Way To Mortgage
March 2019
A New & Better Way To Mortgage

Digital Mortgage Gets Your Deal Done Fast Going the traditional route with mortgage pre-approval can mean ...

Tools
NY Daily News: Michael Sema Tells You How To Pick A Team Of Pros Before Taking The Plunge
June 2016
NY Daily News: Michael Sema Tells You How To Pick A Team Of Pros Before Taking The Plunge

It's the height of the home buying season and if you're thinking of buying a home - Stop.  Michael Sema ...

Tools
How Your Credit Score Affects Your Mortgage – Advice from a Mortgage Company
March 2019
How Your Credit Score Affects Your Mortgage – Advice from a Mortgage Company

Do you know what your credit score is? Or why it's important? Many first-time homebuyers ask a mortgage ...

Tools