Energy Efficient Mortgage Program
by Tim Manni
The US Department of Housing and Urban Development’s (HUD) Energy Efficient Mortgages Program allows homebuyers to finance, or homeowners to refinance, home loans to include the cost of energy-saving home improvements. Energy efficient improvements lower monthly utility bills, making more money available for mortgage payments.
The Federal Housing Administration (FHA)-approved loans are available in 15-and 30-year Fixed Rate or Adjustable Rate Mortgages through any FHA-approved lender. With at least three percent down, the total home loan equals the home’s value plus the cost of making the energy efficient improvements. The maximum amount that can be added to the home loan for improvements is either $4,000 or five percent of the property’s value (not to exceed $8,000). All work must be completed within 90 days of closing.
Energy efficient improvements make homes affordable to more people, help homes sell more quickly, and increase potential resale value. Examples of energy efficient home improvements include:
• Replacing furnace / cooling system
• Insulating attics, crawl spaces, and air ducts
• Replacing doors and windows
• Installing solar technology
• Fixing / replacing a chimney
Be sure to read HUD’s Energy Efficient Mortgages Home Owner Guide. For links to websites with more information on making your home more energy efficient, click here.
