FHA’s Energy Efficient Mortgage program (EEM) helps families save money on their utility bills by enabling them to finance energy-efficient improvements with their FHA-insured mortgage.
Energy Package
The energy package includes a set of improvements that the Borrower chooses to make based on the recommendations of a qualified home energy assessor and can include energy-saving equipment, active and passive solar and wind technologies, materials, labor, and inspections.
Improvements to existing homes must be cost-effective, meaning the money saved in energy bills because of an improvement, must add up to the same or greater amount than the cost of making the improvement. For newly constructed homes, the improvements are cost-effective when they exceed the standards set by the most recent International Energy Conservation Code (IECC) that has been adopted by HUD for new construction properties.
Home Energy Assessment
The assessment must be conducted by a qualified energy rater, assessor, or auditor using whole-home assessment standards, protocols and procedures. Qualified home energy raters/assessors must be trained and certified as one of the following:
Building Performance Institute Building Analyst Professional Building Performance Institute Home Energy Professional Energy Auditor Residential Energy Services Network Home Energy Rater
How much of an Energy
Package can be Financed?
The maximum amount of the energy package that can be added to the borrower’s regular FHA loan amount is the lesser of:
Cost-effective improvements to be made based on the home energy assessment; or The lesser of 5 percent of the Adjusted Value; 115 percent of the median area price of a Single-Family dwelling; or 150 percent of the national conforming mortgage limit.
An FHA-approved lender can access FHA’s EEM Calculator to determine the dollar maximum amount that a borrower can finance for energy improvements. For more information, visit the FHA Resource Center at HUD.gov to search the FAQs, ask a question or send an email.
