Energy Efficient Mortgages (EEMs) are designed to aid homeowners and potential homeowners with their desire to add or include energy efficient aspects to their current or future homes. Sometimes referred to as Green Mortgages or Green Loans, EEMs are offered through FHA and VA approved lenders and allow homeowners to finance their energy efficient improvements by including them in the financing of their mortgage.
If you are looking to obtain an EEM, you must first have a home energy assessment done on the home. The assessment helps identify where energy efficiency opportunities are and see how cost-effective they would be. After the assessment is completed by an energy rater, assessor, or auditor, a home energy report is created. The report includes any suggestions for improvements as well as estimates of energy savings. Based on the home energy report, your lender is able to determine the amount of the mortgage.