U.S. Department of Housing and Urban Development
ENERGY EFFICIENT MORTGAGE PILOT PROGRAM
Section 513 of the Housing and Community Development Act
of 1992 requires the U.S. Department of Housing and Urban
Development (HUD) through the Federal Housing Administration
(FHA) to establish a pilot program to provide mortgage insurance
for Energy Efficient Mortgages. The property you are purchasing
or refinancing may be eligible for this pilot program. The
law requires that you be informed of this program and that
you acknowledge by signing this statement that you understand
the benefits of the program.
What is an Energy Efficient Mortgage?
An Energy Efficient Mortgage, or EEM, recognizes
the energy savings of a home. It allows the home buyer
(or homeowner if it is a refinance) to qualify for a larger
mortgage to finance the construction or installation of
improvements to a home that will increase the home's energy
efficiency. Because the home will be more energy efficient
after installation of the energy saving improvements, the
family can devote more of its income to the mortgage payment.
How do I apply for an EEM?
When you apply for your mortgage loan, tell your lender that
you are interested in an EEM. You or the lender must then
have the home inspected and rated by a home energy rating
organization. Many utility companies and other organizations
perform these energy inspections and ratings. The home energy
rating organization will determine the energy use of the
home and recommend the improvements that may save energy.
For example, the inspection may show that adding additional
insulation, replacing an old furnace or other similar improvements
will increase the energy efficiency of the home. If these
improvements will save you more money than it costs to install
them, then the costs of the improvements (up to certain dollar
limits) may be financed into your mortgage.
Where can I get more information about an EEM?
Ask your real estate broker, mortgage lender, utility company
or state energy office for more information about an EEM.