Mortgage Advisors

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Energy-efficient Mortgage

An energy-efficient mortgage (EEM) is intended for homebuyers who want to save money on utility bills by helping them with the expenses of adding energy-efficient features to a new or existing home as part of the home purchase. Energy-efficient mortgages are provided by the Federal Housing Administration (FHA). Congress mandated a five state pilot program for energy-efficient mortgages in 1992. The program was implemented nationally in 1995.

Energy-efficient mortgages can allow the homeowner to pay a higher mortgage to cover the cost of energy improvements because of the lower utility expenses. EEMs offered by the Federal Housing Administration provide mortgage insurance for individuals to buy or refinance a principal residence and include the energy-efficient improvements in the mortgage.