April 2007

New Mortgages Embrace Energy Efficiency

Two new energy mortgages reward those who work to make their homes more energy efficient.

Because of changes in mortgage lending rules, U.S. banks can now consider the value of energy efficiency measures in the calculations used to qualify borrowers for home loans.

With new homes, lenders can take into account energy savings that leads to lower utility bills. This means the borrower has more money each month they can put toward a mortgage, allowing them to buy a more expensive home.

For existing homes, an energy improvement mortgage can be used to finance the installation of new energy efficiency measures.

Improving energy efficiency can also help if you ever sell. The Appraisal Journal recently estimated the value of homes could increase $20 for every $1 decrease in annual energy costs.

All major residential mortgage underwriters, including Fannie Mae, Freddie Mac, HUD and VA, offer energy efficient mortgages. Ask your local lender for details.

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