Energy Efficient Mortgage
This program is designed to help with the extra costs of making the home energy efficient. The borrower may obtain a FHA mortgage that exceeds the amount of the mortgage. The borrower only needs to qualify for the amount of the sales price of the home. In other words this program lends you the extra money it takes to make the improvements, with out needing to qualify for the extra, nor make a down payment on the extra.
This is so the homeowner can make energy efficient improvements to the property. The borrower must have a 3% cash investment in the home based on sales price. The cost of the energy efficient improvements to the property that are eligible for financing into the mortgage can not be greater than 5% of the value of the property but not to exceed $8,000. The eligible properties are 1 to 4 unit existing and new properties. These improvements must be cost effective; the total cost of the improvements are less than total present value of the energy saved over the life of the improvement.
The cost of the improvements and the estimate of the energy saved must be determined by a home energy rating. The cost of this may be financed as part of the package.
Existing homes may also qualify but only after the 1st 90 days after the loan has closed. Unless the mortgage loan was a 203k loan; in that case the improvements must be installed within 180 days after the closing of the mortgage.
Newly constructed homes must have the improvements done prior to closing on the mortgage. The maximum loan amount for a single family home will also depend on its location, this also adjusts annually. The extra cost of the improvements is add to the mortgage amount, this may exceed the maximum mortgage limit.