The following is the information on energy-efficient financing programs, including
mortgages, home improvement loans, refinancing, and home energy ratings.
• Financing an Energy-Efficient Home
You can benefit from energy-efficient financing whether you're buying, selling,
refinancing, or remodeling a home. If you're looking to buy an energy-efficient
home, you can qualify for a better, more comfortable home because with lower utility
costs, you can afford a slightly larger mortgage payment. You can also obtain financing
to make energy-efficient improvements to an older home before moving in or to your
existing home. If you put your home on the market, you can use its energy efficiency
as an attractive selling point.
Energy-Efficient Financing Program
You can apply for energy-efficient financing through a government-insured or conventional
loan program. Some states even have programs for their residents, so it's a good
idea to contact your state energy office to find out if your state does.
There are two types of energy-efficient mortgages (EEMs): one for a new home and
one for an existing home. With an EEM, you can purchase or refinance a home that
is already energy efficient, or you can purchase or refinance a home that will become
energy efficient after energy-saving improvements are made. Most energy-efficient
financing programs offer both types of EEMs, as well as home-improvement loans for
making energy-efficiency upgrades to your existing home.
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• U.S. Department of Housing and Urban Development:
Energy-Efficient Mortgage Program
Federal Housing Administration’s Energy Efficient Mortgage program (EEM) helps homebuyers
or homeowners save money on utility bills by enabling them to finance the cost of
adding energy efficiency features to new or existing housing as part of their FHA
insured home purchase or refinancing mortgage.
Purpose of Energy Efficient Mortgage Program
EEMs recognize that reduced utility expenses can permit a homeowner to pay a higher
mortgage to cover the cost of the energy improvements on top of the approved mortgage.
FHA EEMs provide mortgage insurance for a person to purchase or refinance a principal
residence and incorporate the cost of energy efficient improvements into the mortgage.
The borrower does not have to qualify for the additional money and does not make
a downpayment on it. The mortgage loan is funded by a lending institution, such
as a mortgage company, bank, or savings and loan association, and the mortgage is
insured by HUD. FHA insures loans. FHA does not provide loans.
Read more...
• Energy Ratings and Mortgages
A home energy rating involves an analysis of a home's construction plans and onsite
inspections. Based on the home's plans, the Home Energy Rater uses an energy efficiency
software package to perform an energy analysis of the home's design. This analysis
yields a projected, pre-construction HERS Index.
The HERS Index is a scoring system established by the Residential Energy Services
Network (RESNET) in which a home built to the specifications of the HERS Reference
Home (based on the 2004 International Energy Conservation Code) scores a HERS Index
of 100, while a net zero energy home scores a HERS Index of 0. The lower a home's
score, the more energy efficient it is in comparison to the HERS Reference Home.
Energy efficient homes may qualify for mortgages that take into account a home's
efficiency. Residential Energy Services Network (RESNET) provides information on
home energy rating systems, energy efficient mortgages, and finding certified energy
raters and lenders who know how to process energy efficiency mortgages.
Read more...
• Refinancing for Energy-Efficiency Improvements
Making smart choices helps consumers keep money in their pockets and save energy.
Learn more about how you can save energy and money in the four areas you live your
life — at home, at school, at work and on the go — at the Alliance’s consumer website.
• Rebates for ENERGY STAR® Appliances
You may have been eligible to receive rebates from your state or territory for the
purchase of new ENERGY STAR qualified appliances. These rebates were
funded with $300 million from the American Recovery and
Reinvestment Act of 2009. Under this program, eligible consumers could receive
rebates to purchase new energy-efficient appliances when they replaced used appliances.
Read more...
Tax Credits for Energy Efficiency
If you purchase an energy-efficient product or renewable energy system for your
home, you may be eligible for a federal tax credit. Below is an overview of the
federal tax credits for energy efficiency that are currently available.
While some energy efficiency tax credits are available through 2011, others are
available through 2016 as noted below. In addition, tax credits were available in
2009 and 2010 which can still be claimed on your 2010 taxes. Learn more about the
tax credits that expired at the end of 2010.
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Special Offers and Rebates from ENERGY STAR
Partners
To encourage customers to buy energy efficient products, ENERGY STAR partners occasionally
sponsor special offers, such as sales tax exemptions or credits, or rebates on qualified
products. Partners also occasionally sponsor recycling incentives for the proper
disposal of old products.
How New Homes Earn the ENERGY STAR
To earn the ENERGY STAR, a home must meet strict guidelines for energy efficiency
set by the U.S. Environmental Protection Agency (EPA), making them 20–30% more efficient
than standard homes. Homes achieve this level of performance through a combination
of energy–efficient improvements, including,
- Effective Insulation Systems
- High–Performance Windows
- Tight Construction and Ducts
- Efficient Heating and Cooling Equipment
- ENERGY STAR Qualified Lighting and Appliances
To ensure that a home meets ENERGY STAR guidelines, third–party verification by
a certified Home Energy Rater (or equivalent) is required. This Rater works closely
with the builder throughout the construction process to help determine the needed
energy–saving equipment and construction techniques and conduct required on–site
diagnostic testing and inspections to document that the home is eligible to earn
the ENERGY STAR label.
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Features & Benefits of ENERGY STAR Qualified New Homes
To earn the ENERGY STAR, a home must meet guidelines for energy efficiency set by
the U.S. Environmental Protection Agency. These homes are at least 15% more energy
efficient than homes built to the 2004 International Residential Code (IRC), and
include additional energy-saving features that typically make them 20–30% more efficient
than standard homes.
ENERGY STAR qualified homes can include a variety of 'tried-and-true' energy-efficient
features that contribute to improved home quality and homeowner comfort, and to
lower energy demand and reduced air pollution:
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