FHA EEM loan benefits & guidelines
Backed by the Federal Housing Administration (FHA), the FHA Energy Efficient Mortgage (EEM) allows buyers and homeowners to make energy-efficient upgrades to save* on utility bills. Upgrades can include improvements such as better insulation or energy-saving HVAC systems.
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Why choose an FHA EEM?
Whether you’re purchasing an outdated home or refinancing to fund upgrades, an FHA EEM lets you fold the cost of improvements into a mortgage with a single monthly payment.
FHA EEM loan guidelines
To qualify for an FHA EEM, you will need:
- Down payment of 3.5%
- Property that is your primary residence
- Loan amount within FHA EEM limits
You can finance the lesser of recommended improvement costs or 5% of the home’s adjusted value, 115% of the area’s median home price or 150% of the national conforming loan limit. To qualify, you’ll need a professional energy assessment to identify cost-effective upgrades.
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How to apply for an FHA EEM loan
Applying for an FHA Energy Efficient Mortgage is simple with Rate’s Digital Mortgage. Follow these steps.
1. Review your finances
Check your credit score, income, DTI ratio and cash on hand for a down payment.
1. Review your finances
Check your credit score, income, DTI ratio and cash on hand for a down payment.
2. Check eligibility
Loan amounts must fall within FHA EEM limits.
3. Apply online
Once you submit your application, your Loan Officer will help you from there.
4. Home energy assessment
You must complete a home energy assessment conducted by a qualified professional.
5. Close and start upgrading
Upgrade work can begin after loan closing.
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*Savings, if any, vary based on the consumer’s credit profile, interest rate availability and other factors. Contact Rate for current rates. Restrictions apply.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply.
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Sources:
https://www.hud.gov/program_offices/housing/sfh/eem/energy-r