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Want a mortgage
that lets you use the projected savings in energy costs to increase your
purchasing power—qualifying you for
a higher priced home?
How about a mortgage that
recognizes it costs less to live in a higher priced home with built-in
energy efficient features than to live in a less expensive home that has
high energy costs?
Special Financing
Options
When shopping for
a new home, consider an "Energy Efficient Mortgage:" (EEM) as
a means of qualifying you for a home or for a higher priced home. The
benefits of an EEM are generally summarized in two features:
- increased buying power
- qualify for a higher priced home
- lower monthly cash flow
projections-realize lower costs to own and operate.
Advantages of an EEM include:
- increases "Debt-to-Income
Ratio" used by lender to qualify buyer for the mortgage
- typically qualifies buyer
for a higher priced home
- increases buyers ability
to contract with the builder for added features
- typically permits the buyer
to realize a lower monthly payment for the combined cost of the mortgage
and energy usage.
Nationally, statistics show
that almost 7% more home buyers will qualify for the purchase of a new
home using an EEM. In addition,typically, these home buyers will have
a lower payment for the combined cost of their mortgage and energy usage
than they would experience had they purchased a new home not qualifying
for them for an EEM.
It's a win for the buyer,
more home and less payment.
What is an Energy Efficient
Mortgage (EEM)?
A mortgage that credits the value of the home's energy efficiency
into the mortgage. It allows the lender to increase the buyer's "Debt-to-Income
Ratio" when qualifying the buyer for the mortgage by effectively
using some of the savings in energy costs to pay the mortgage payment.
Home buyers typically qualify for higher priced homes when using an EEM.
EEMs are sponsored by both
federally insured mortgage programs as well as conventional secondary
mortgage products.
How can I know if the home
qualifies for an EEM?
One quick solution is to shop for homes built energy right®.
These homes have been built with energy efficient features that lower
the cost of heating, cooling and water heating. If it is not energy
right®, you may be required to get an independent
certification (audit report), certifying the home was built with energy
efficiency improvements necessary to qualify the home for financing using
an EEM.
Comparison Example
With a monthly income of $3000, a home buyer, at today's low mortgage
rates, might be expected to qualify for a maximum mortgage of $93,678.
If that same home buyer were to buy a home with documented energy efficient
features qualify for a 2% "Income-to-Debt Ratio" (by using an
EEM), the buyer could be looking at a maximum mortgage of $100,400. That's
an increase of over $6700 in purchase price.
Homes built energy right®
can qualify most buyers for an EEM. Several lenders in the Tennessee Valley
offer EEMs.
Ask your mortgage lender about Energy Efficient Mortgages.
For
more information about EEMs, refer to "HERS/EEM Info" at http://www.natresnet.org.
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