Green Mortgages, Improvement Loans and Incentives

EEMs are typically used to purchase a new home that is already energy efficient such as an ENERGY STAR certified home. The term EEM is commonly used to refer to all types of energy mortgages including Energy Improvement Mortgages (EIMs), which are used to purchase existing homes that will have energy efficiency improvements made to them. EIMs allow borrowers to include the cost of energy-efficiency improvements to an existing home in the mortgage without increasing the down payment. EIMs allow the borrower to use the money saved in utility bills to finance energy improvements.

Both EEMs and EIMs typically require a home energy rating to provide the lender with the estimated monthly energy savings and the value of the energy efficiency measures — known as the Energy Savings Value. EEMs (and EIMs) are sponsored by federally insured mortgage programs (FHA and VA) and the conventional secondary mortgage market. Lenders can offer conventional EEMs, FHA EEMs, or VA EEMs.

PHFA offers income limited loans to moderate income buyers through the Homeowners Energy Efficiency Loan Program (HEELP). Loans are between $1,000 and $10,000 for specific energy efficiency repairs at a fixed-rate of one percent (1%) for ten years with no prepayment penalties. The money can be used for new roofs, air sealing, insulation, windows, doors and heating and cooling replacement.

A number of local companies offer energy improvement programs, ranging from discounted home energy audits, free lightbulbs and incentives for home energy improvements. You can find out more on their websites.