Fannie Mae's Energy Efficient Mortgage (EEM)
Fannie Mae's EEM pilot is an underwriting variance that is able to be used with most of Fannie Mae mortgage products including: Conventional Fixed Rate and Adjustable-rate Mortgages. The same Fannie Mae product guidelines apply with the exception of the debt-to-income ratio and loan to value which allow for an additional variance to be applied to the qualifying ratios and also allowing for an adjustment to the appraised value.
Properties eligible for Fannie Mae's EEM are:
- Owner Occupied Residential Real Property
- Purchase or Refinance
- New Construction
- Purchase of existing home which are already energy efficient
When purchasing an existing property, the improvements can be completed prior to or after the close of the mortgage.
Up to 100% of improvements can be financed. Loan maximums can not exceed 15% of the value of the home.
The monthly savings resulting from energy efficient improvements is directly applied to the borrower's maximum monthly mortgage payment. This can allow borrowers to qualify for a larger mortgage or will help those whose debt-to-income ratios are borderline high for the property they are purchasing.