FHA Energy Efficient Mortgages

FHA Energy Efficient Mortgages

Posted on May 23, 2019

Green is the new black. Going green, that is. If you have clients who sound interested in at-home energy efficiency, you should be talking to them about the FHA Energy Efficient Mortgages program. This government program helps homeowners save money on utilities by allowing them to finance energy-efficient improvements with an FHA-insured mortgage.

Benefits Your Clients Will Love

With these energy efficient mortgages backed by the FHA, there are plenty of benefits homeowners can enjoy for years to come.

  • Energy improvements can lower the cost of utility bills
  • Increases home buying power and capitalizes energy savings
  • Frees up income that can go toward other expenses
  • No income level requirement
  • No additional down payment

Down to the Basics

If you’re thinking of telling your client about FHA Energy Efficient Mortgages, here are a few of the basic requirements they or their home will have to meet.

  • Owner occupied, one to four units only
  • All improvements must be completed within 90 days after closing
  • FHA Energy Efficient Mortgage may be able to be combined with an FHA 203(k)
  • 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% of: the adjusted value; 115% of the median area price of a single-family dwelling; or 150% of the national conforming mortgage limit
  • The maximum FHA Nationwide Mortgage Limit for an area may be exceeded by the maximum financeable energy package
  • Eligible improvements are identified by home energy rating as having a combined present value greater than the cost of upgrades

This opportunity is too good to pass up. Educate your clients on the FHA Energy Efficient Mortgages program and find out if they’re eligible for savings today.