Energy Efficient Mortgages

Leaky windows? No insulation? Low on funds? We've got the answer! The energy-efficiency mortgage program provides mortgage insurance to purchase or refinance a principal residence and incorporate the cost of energy-efficient improvements into the mortgage. This type of mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD.

Eligibility Specifics

• Borrowers are eligible for approximately 97% financing. Borrowers are able to finance closing costs and the up-front mortgage insurance premium into the mortgage. Borrowers also are responsible for paying an annual premium.
• Eligible properties include single-family, two-unit and new construction residences.
• The allowable cost of the energy-efficient improvements that may be eligible for financing into the mortgage is the greater of either $4,000 or 5% percent of the property's value (not to exceed $8,000).
• To be eligible for inclusion in the mortgage, the energy-efficient improvements must be cost-effective, meaning that the total cost of the improvements is less than the total present value of the energy saved over the useful life of the energy improvement.
• The cost of the energy improvements and estimate of the energy savings must be determined by a home energy rating system (HERS) or energy consultant. Up to $200 of the cost of the energy inspection report may be included in the mortgage.