| (EEMs)Energy Efficient Mortgages
A HERS rating system is used when obtaining an Energy Efficient Mortgage (EEM).
This is a special type of mortgage that allows a purchaser to stretch his debt-to-income ratio from 28% to 30%.
Under normal mortgage guide-lines a borrower is allowed to spend 28% of their gross income for a mortgage payment include- ing loan principal, interest, real estate taxes and insurance (PITI). This number was arrived at by taking the average families bud-get and calculating the amount spent for such things as food, clothing, utilities, car payments, savings, vacations and other day to day expenses. The amount left over for a mortgage payment gives a 28% debt to income ratio.
Approximately 14% of the budget is allocated to utilities for heating,
cooling and lighting. When a home is built to be energy efficient,
less is spent on utilities. This money saved on utilities is then
available for other things.
Because you're sending less money to your utility company, lenders
will allow you larger loans. So now you can afford that house of
your dreams or get the things you want, like the extra fireplace
in the dining room .
Even by taking out a larger loan, with an EEM
your total monthly outlay will be less. Energy Efficiency Mortgages
are available through almost all lending sources such as FHA,VA
and conventional mortgages which allow additional loan limits based
on the energy savings a qualifying home offers.
See our Lender page
and the following links for more information.
More
EEM Information
HUD EEM Program
Fannie
Mae EEM
Freddie Mac EEM
Energy Efficiency Mortgages are available
through almost all lending sources such as FHA,VA and conventional
mortgages which allow additional loan limits based on the energy
savings a qualifying home offers. | 
