FHA & HUD Energy Mortgage Programs

FHA energy efficient mortgages allow lenders to add 100 percent of the additional costs of adding cost efficient energy home improvements to an already approved mortgage loan. The additional cost are capped at 5 percent of the home's value or $8,000 whichever is greater.

No additional down payment is required above the traditional down payment requirements. The EEM's are available for both site built homes and manufactured homes. Detached homes, townhouses, condominiums and one to four unit single family residences.

Traditional FHA loan limits still qualify, however, the additional amount added to the loan for the improvements does not effect the loan limitations.

With the FHA EEM, you can finance the costs of the improvements without the need to qualify for additional financing. The costs are rolled together with the financing of the new home or refinanced property into one single mortgage.

An EEM loan can be either a 15 or 30 year mortgage or an Adjustable Rate Mortgage (ARM). FHA requires that you make at least a 3.5 percent cash investment on the property based on the sale price and not the amount of the mortgage. Meaning, no additional down payment is required for the additional amount financed.

You can begin making improvements to your home after the loan's closing. The work must be completed within 90 days after closing. You may also finance the cost of the Energy Audit with the mortgage if, including these fees is cost effective.