Energy-efficient mortgages
Finding money for home energy improvements is getting easier because many lending institutions now offer mortgages designed to cover the cost of energy upgrades. Energy efficiency may come with a higher initial price tag — whether it’s a new home with the latest technology or an existing home remodeled with energy improvements, such as added insulation or a more efficient furnace. While all homes eventually pay for themselves through lower energy bills, they might be difficult to afford initially, and that's where an Energy Efficient Mortgage (EEM) can help.
There are two types of energy mortgages:
- Energy Improvement Mortgage - Finances the energy upgrades of an existing home in the mortgage loan using monthly energy savings
- Energy Efficient Mortgage - Uses the energy savings from a new energy efficient home to increase the home buying power of consumers and capitalizes the energy savings in the appraisal
EEMs are available from conventional lenders and through many government-insured loan programs (see Energy Star). If you qualify for a conventional mortgage, you qualify for an EEM. The process begins with the home you’re planning to buy or build being subject to an energy rating that has been ordered by your lender. With that, your lender can help you identify specific cost-effective improvements that should be made or show how a new home will perform when completed.
Some state or local programs offer incentives for home energy upgrades, so check what’s available in your area. (To View Incentives Available The US go to www.DsireUSA.org.) Plus, energy-efficiency improvements during 2006 and 2007 are eligible for federal tax credits, helping you save even more money. (See Get Cash Back for Energy Improvements at www.MotherEarthNews.com.)
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Energy-efficient mortgages are offered by the following financial institutions:
US
- Indigo Financial Group is one of the first Energy Efficient Mortgage lenders in the US.
- MyEnergyLoan is a national network of lenders dedicated to providing aggressive closing cost discounts and lower interest rates for buyers of energy efficient homes.
- Home First Mortgage
UK
Australia
