Energy efficient mortgages, otherwise known as green mortgages have been around for years. Technically, according to the U.S. Government, in 1979, President Jimmy Carter authorized them.
Recently, as of the beginning of 2007, their backing by Fannie Mae and Freddie Mac has actually declined. Fannie Mae no longer offers them. Freddie Mac only offers them through their FHA 203K rehabilitation program, and the VA offers them as well.
The Green Mortgage – The Energy Efficient Mortgage
The green mortgage that many folks have written about is called in technical terms the Energy Efficient Mortgage EEM. This program provides you with the opportunity to use mortgage financing to make energy efficient improvements to your home. Others define the green mortgage as a mortgage where the lender gives some discount in closing costs for having energy efficient appliances or other upgrades on the property that you buy or refinance. Another version of the green mortgage is where the mortgage company agrees to plant trees or do some other form of environmental upgrade on behalf of you getting the green mortgage.
FHA Is The Only Reliable Green Mortgage Program Right Now in 2008
EEM's, are available through FHA and VA and can be taken out while purchasing or refinancing a home. You may get this loan if you are looking to rehabilitate your home. If you are going to use the FHA rehabilitation loan, or better known as the 203K loan, to improve your property you will agree to have your property inspected by an FHA approved inspector authorized to perform a HERS report Home Energy Rating Systems. This report will determine what energy efficient home improvements are required to make your home more energy efficient. It will also determine what kind of monthly savings you will see once the improvements are complete.
If FHA approves your mortgage with energy efficient upgrades then the money for the upgrades is held by the title company until the work is completed. Upon notification that the rehabilitation work is complete, an FHA inspector or appraiser will re-inspect your home to note the status of the improvements. With the improvements complete the money held by the title company is released to pay the contractors responsible for conducting the work your home. As a homeowner, you are eligible for somewhere between $4,000 and $8,000 depending on the amount energy efficient improvements to be made.
VA Has Green Mortgages Too
Regarding the VA Energy Efficient Mortgage, active duty personnel, retired vets, and reservists are eligible for this loan. If you fit into these categories, then you maybe eligible to finance up to $3,000 worth of energy efficient upgrades with showing receipts or estimates and and up to $6,000 if the upgrades are determined to cause the property to be more energy efficient.
Stay tuned to GetPreQualified.com for additional green mortgage information as time passes. Homeowners are more and more concerned about how they can help with the environment and since the home is a big way for someone to make a difference, green mortgages aren't going away. Rather, green mortgages are just getting new roots.
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