Energy Efficient Mortgage
HUD Mortgagee Letter 93-13: Attachment C
Energy Efficient Mortgage Pilot Program
Section 513 of the Housing and Community Development Act of
1992 requires the U.S. Department of Housing and Urban
Development (HUD) through the Federal Housing Administration
(FHA) to establish a pilot program to provide mortgage insurance
for Energy Efficient Mortgages. The property you are purchasing
or refinancing may be eligible for this pilot program. The law
requires that you be informed of this program and that you
acknowledge by signing this statement that you understand the
benefits of the program.
What is an Energy Efficient Mortgage?
An Energy Efficient Mortgage, or EEM, recognizes the energy
savings of a home. It allows the homebuyer (or homeowner if it is
a refinance) to qualify for a larger mortgage to finance the
construction or installation of improvements to a home that will
increase the home's energy efficiency. Because the home will be
more energy efficient after installation of the energy saving
improvements, the family can devote more of its income to the
mortgage payment.
How do I apply for an EEM?
When you apply for your mortgage loan, tell your lender that
you are interested in an EEM. You or the lender must then have
the home inspected and rated by a home energy rating
organization. Many utility companies and other organizations
perform these energy inspections and ratings. The home energy
rating organization will determine the energy use of the home and
recommend the improvements that may save energy. For example, the
inspection may show that adding additional insulation, replacing
an old furnace or other similar improvements will increase the
energy efficiency of the home. If these improvements will save
you more money than it costs to install them, then the costs of
the improvements (up to certain dollar limits) may be financed
into your mortgage.
Where can I get more information about an EEM?
Ask your real estate broker, mortgage lender, utility company
or state energy office for more information about an EEM.
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HUD
Mortgagee Letter 93-13 |
