Energy Efficient Mortgages

Energy Efficient Mortgages (EEMs) can be used by homeowners to finance a variety of energy efficiency measures, including renewable energy technologies, in a new or existing home. The federal government supports these loans by insuring them through Federal Housing Authority (FHA) or Veterans Affairs (VA) programs. This allows borrowers, who might otherwise be denied loans, to pursue energy efficient improvements by securing lenders against loan default and providing them with confidence in lending to customers whom they would usually deny. The FHA and VA EEM programs allow lenders to add up to 100% of energy efficiency improvements to an existing mortgage loan with certain restrictions. Fannie Mae, Freddie Mac, FHA and VA have adopted special underwriting guidelines to make financing energy efficiency less burdensome.
In 2008, the maximum qualifying loan amount was increased by the Housing and Recovery Act of 2008.

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