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Energy Efficient MortgageHUD Mortgagee Letter 97-10U. S. Department of
Housing and Urban Development April 1, 1997 OFFICE OF THE ASSISTANT
SECRETARY FOR HOUSING MORTGAGEE LETTER 97-10 TO: ALL APPROVED MORTGAGEES SUBJECT: Single Family Loan Production - Energy Efficient Mortgages on Section 203(h) Mortgages for Disaster Victims Areas With Mortgagee Letter 93-13 (ML 93-13) , FHA announced a pilot program for insuring mortgages on energy efficient properties in five states. ML 95-46 expanded the Energy Efficient Mortgage (EEM) program nationwide and modified it to also include Section 203(k) rehabilitation mortgages as well as to permit the use of adjustable rate mortgages. Effective immediately, the EEM program may now also be used in conjunction with Section 203(h) mortgages made to victims of presidentially-declared disasters. The mortgage must comply with both Section 203(h) requirements as well as those for the EEM program, both of which are described in chapter two of HUD Handbook 4155.1 REV-4 , Change 1. However, the program is limited to one-unit detached houses only. Two-, three-, and four- unit properties are not eligible, nor are condominium units. Adjustable rate mortgages may be used on Section 203(h) mortgages. Lenders are responsible for submitting in the endorsement binder the documents used to calculate the maximum loan amount for the EEM, as well as providing documentation attesting to the eligibility of the borrower to obtain Section 203(h) financing, i.e., evidence of destruction of the previous residence. If you have any questions regarding this issue, please contact your local FHA office. Sincerely yours, |
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