Energy Efficient Mortgages

Did you know there are incentives designed to help homebuyers make cost effective energy-efficient upgrades at the time of an FHA or VA Home Loan Purchase or Refinance? An Energy Efficient Mortgage (EEM) used in conjunction with Energy Upgrade California allows homebuyers to finance energy upgrades with no additional qualifying, no delays in closing, plus local utility companies actually offer rebates to make these upgrades. These Utility Rebates can be found at www.energyupgradesca.org, and the rebate amount is based on the percentage of increased energy efficiency; for every 10% increase, you can be granted a $1,000 rebate up to $4,500. “The process is easy- to qualify when purchasing or refinancing, an Energy Audit must be performed on the home by a BPI Certified Inspector, then a H.E.R.S Energy Audit must be conducted to indicate suggested upgrades and the Energy Upgrades must be cost effective. In other words the amount your utility bills are expected to decrease is more than the amount your mortgage will increase by financing these upgrades which must be installed by a BPI Certified Contractor,” said Gary Martell Jr., President of Mountain West Financial, Inc.

“Typical energy improvements include central heating and air conditioning, dual-pane windows, increased attic and wall insulation, energy-efficient water heaters, weather-stripping, whole-house ventilation fans, and new heating/cooling duct work,” said Bobbi Glassel, Facilitator with Synergy Energy Efficient Mortgage. “We encourage our homebuyers and folks who are refinancing to take advantage of the opportunity to reduce their utility bills and protect our environment by participating in the Energy Efficient Mortgage Program; small changes can lead to big results for conservation of our natural resources.”

Because of our unique climate zones here in California, many homes built before 2000 can benefit from an Energy Efficient Mortgage. The EEM amount for an FHA loan is up to than 5% of the value of the property (ex: a $200,000 home can receive up to $10,000 in improvements) and a VA loan can receive up to $6,000. “At a time when green initiatives are important, so are the savings and rewards to homebuyers for their energy-efficient houses”, said Carla Ferguson, Executive Vice President, Mountain West Financial, Inc. The EEM program can also be combined with an FHA 203(k) streamline, weatherization or even downpayment assistance programs. The 203K Streamline allows up to $35,000 for improvements which is great for REOs, older homes built in or before 1985, and more.

“The benefits are two-fold - not only do our homebuyers get a more comfortable house now, but if and when the time comes to sell their house, homes with these improvements generally sell more quickly and can help attract more attention in a competitive market,” continues Carla Ferguson. If you’re interested in purchasing or refinancing a home, make sure you ask your lender about the EEM program.

 

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.