What Is an Energy Efficient Mortgage (EEM)?

The Energy Efficient Mortgage, or EEM, is a type of mortgage program that is offered by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA) and Freddie Mac and Fannie Mae loans. Individuals can utilize this type of loan when they are purchasing a new house that is considered energy efficient. They can also use this type of mortgage to purchase a house that they are planning to make energy efficient.


One of the big benefits of this type of mortgage is that lenders allow a different debt-to-income ratio when qualifying borrowers. This allows people to purchase larger homes with this type of program. They will be able to borrow enough money to purchase the property itself and pay for the necessary upgrades to make the home energy efficient.


This type of mortgage has become very popular because of the increased emphasis on green products. More people are concerned with the environment than ever before, and this mortgage provides an incentive for people to purchase energy-efficient homes.


In order to get this type of mortgage, you are going to have to meet some requirements. For example, if you are working with the FHA, you have to make a 3.5 percent down payment. The costs of the improvements have to be less than the value of the energy that is going to be saved over their lifetimes. 

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