Energy Efficient Mortgages in Seattle Made Simple

The FHA’s energy efficient mortgage (EEM) program is a great way for homebuyers or homeowners to finance energy-efficient upgrades with a savings. Program is available in Bellevue, Kent, Redmond, Kirkland and other cites as well.

Why is an EEM a great idea? Most, if not all of the costs to upgrade can be covered through a combination of the EEM, federal & state tax credits, and credits or grants from the local utility companies. The bottom line is that it is entirely possible to leverage these funds to maximize home performance. Even if your home is a ‘good’ energy performer, it could be ‘great’ at little or no cost to you. We have seen dramatic decreases in utility costs for homeowners who implement the upgrades recommended by our energy analysts. Saving the home owner money!

The amount one can borrow with an FHA EEM is limited to the lesser of 5% of the appraised value of the home or $8,000, with a minimum of $4,000. This money is rolled into the mortgage and not out of pocket.

The assumption is that the increase in the monthly payment will be offset by a reduction in your utility bills. For the $8,000, it is possible to replace a furnace, upgrade windows, increase insulation and so on.

Do I qualify for an EEM?  If you qualify for an FHA loan, you qualify for an FHA EEM. The FHA program is more reasonable than other loan programs: a down payment as low as just 3% and less-than-perfect credit are two features of FHA. You do have to be able to document income to qualify for an FHA loan. Bank of America and the State Employees Credit Union offer an EEM, and others will follow.

Steps to getting an EEM. The first step is to have our RESNET-certified HERS rater inspect the home. The rater generates a report showing the intended improvements, their cost, the predicted amount of energy they will save, and the predicted reduction in energy-related expenses. If the improvements pay for themselves during their useful lifetime, you can add them to the EEM.

The HERS report and the homeowner-selected improvements become part of the escrow process. Once escrow closes, the homeowner or a general contractor hire licensed contractors to complete the upgrades. They are paid for with money held in escrow. When the work is completed, our HERS rater inspects the upgrades to make sure they were done correctly. The final inspection may involve our blower door and duct test to verify improvements.

The fees for the initial HERS inspection and rating, along with the final inspection, can be included as one of the EEM improvements. For a typical EEM, the long-term savings can be substantial, even if you pretend that fuel prices will never increase. Call us today or use our online form.

We also perform Home Energy Audits for owners.