The EEM - what is it and why doesn't everyone have one?by Richard(Calabasas, CA) If you haven't already, check out the Green Mortgages section for more information on the energy efficient mortgage. They really are as good as they sound. You are allowed to borrow additional money on your mortgage to finance energy efficient upgrades to your home. There is no additional down payment. You automatically qualify. If you make the right upgrades (and you have to) you will be better off financially because your bills will be lower. Your home will be more comfortable to live in. So why doesn't everyone have one? Well there are a number of reasons but the main ones seem to be that; 1) Very few people know anything about them and I don't just mean home buyers. I'm including real-estate agents and mortgage brokers and lenders. 2) Most lenders haven't done much, if anything, to promote them. There is additional paperwork and additional risk given that they are lending more money to the home buyer. Yes, there is insurance for the FHA and VA energy efficient mortgage but why would the lender want to take the risk given that there is no great financial incentive to do so? 3) Until recently (June 09) the maximum anyone could borrow on the EEM was $8,000. Yes, this is enough to do some great energy efficient upgrades but if you wanted to make your whole home energy efficient from top to bottom, I'm talking insulation, weatherization, windows, doors, heating, cooling, hot water et al then eight thousand may not have covered it. Now the FHA have changed it. In their words; The maximum amount of the portion of the EEM for energy improvements is the lesser of 5% of: The value of the property, or 115% of the median area price of a single family dwelling, or 150% of the conforming Freddie Mac limit. which in itself isn't resoundingly clear but it is likely a lot more than the $8000 cap for most people.
How many people have an EEM?by Richard(Calabasas, CA) You would have thought quite a few but...... nope. They have been around since the Carter administration and everyone who wants to splash a little green will reference them every so often but here's the latest...... I spoke with a very nice lady at the Housing and Urban Development (HUD) offices last week. They administer the FHA energy efficient mortgages and she informed me that out of the 1,199,600 mortgages the FHA insured during 2008 a massive 1,235 of them were EEM's. If my math is anything like then I work that out to be 0.1% Is that right?
The mystical Energy Efficient Mortgage.
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