Energy Mortgages Help Pay for Energy Efficiency
02/01/2007

The cost of owning a home may soon decrease for the owners of energy-efficient houses. Thanks to recent changes in mortgage lending rules among U.S. banking institutions, the value of energy efficiency measures, such as attic insulation or energy-efficient heating systems, can now be included in the calculations used to qualify borrowers for home loans.

The new energy mortgages come in two varieties:

• For the purchase of new homes, the Energy Efficient Mortgage allows lenders to consider how much fuel the home will use in the future. Since efficient homes tend to have lower utility costs, this mortgage allows borrowers to apply those monthly savings toward the purchase of a more expensive home.        

• For improvements to existing homes, the Energy Improvement Mortgage can be used to finance the installation of new energy-efficiency measures.

Both mortgages allow homeowners to build equity faster by taking advantage of their home’s efficiency.

Efficient homes provide benefits that go beyond fuel savings. They are warmer in the winter and cooler in the summer, and because they are less drafty, they provide a cleaner, quieter, and more comfortable indoor environment. And if you choose to sell your efficient home, it may be more valuable, too. A recent report in the Appraisal Journal estimated that the market value of your home could increase by $20 for every $1 decrease in your annual energy costs.

All the major underwriters of residential mortgages – including FannieMae, Freddie Mac, HUD, and the VA – now offer specialized loans for energy efficient homes. Ask your local lender for details.

Chris Dorsi is a nationally recognized expert on energy efficiency. For more free energy-saving tips, visit the Saturn Resource Management website at www.srmi.biz

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