What is an energy efficient mortgage program? In simple terms it is simply a mortgage, or a refinance for an energy efficient home that has been certified by HERS (Home Energy Rating System). It can still be a conventional Fannie Mae or Freddie Mac loan or a federally insured FHA or VA loan.
If you qualify for a regular loan, then you will qualify for the energy efficient mortgage program. The difference would be the house. You will have to give the HERS report to your lender to see how much difference it will make. Typically the HERS report costs between $100 to $300. Sometimes this can even be rolled into the settlement costs. If you review your energy efficiency plans with your banker, they will be able to help you decide whether or not to have the inspection done.
Normally you will be able to increase your debt to income ratio. That is because your monthly bills will be decreased by the energy efficiency of the house. This translates into you getting a larger loan and perhaps a better home.
There are several other advantages to the energy efficient mortgage program. Besides having a bigger and or better home, you will be paying less in monthly energy bills. So even though your mortgage payments are more, your total monthly cost will be less. When it becomes time to sell your home, you will have a home that sells quicker and has a wider range of buyers. It will be much more attractive compared to the other homes on the market.
So whether you are buying a new home or making your present home more energy efficient, be sure to check into the energy efficient mortgage program and compare the savings!