Energy-Efficient Mortgages
The FHA has created an Energy-Efficient Mortgage (EEM) program to help achieve national energy-efficiency goals, reduce pollution and provide better housing for people who might not otherwise be able to afford it. First, the home must be evaluated according to the Home Energy Rating System, which requires a home to exceed energy codes by 30 percent. The Home Energy Rating system awards stars on a scale of one to five. ECO-Block homes typically receive five stars, earning the designation of an Energy Star Home. In turn, this qualifies certain buyers for the Energy-Efficient Mortgage.
This program allows buyers of energy-efficient homes to qualify for up to a five percent stretch in their debt-to-income ratio due to lower monthly utility costs. FHA-approved lending institutions, which include banks, savings and loan institutions and mortgage companies, can make EEM loans.
