As the single largest housing expense after a mortgage payment, your utility costs can have a direct impact on how large a mortgage you can afford. You can save money on the cost of utilities by purchasing new energy-efficient heating and cooling systems or by making home improvements, such as weatherizing and insulating older homes and these investments can end up saving you money through lower utility bills.
As a new homebuyer or current homeowner, you may be able to use FHA’s Energy Efficient Mortgage (EEM) to finance the cost of these improvements. FHA which is part of HUD offers the Energy Efficient Mortgage Program to allow homebuyers to finance the purchase of a home—or refinance your current mortgage—and include the cost of the energy-saving, cost-efficient improvements through a single mortgage.
FHA’s EEM program recognizes the monthly utility cost savings when homebuyers make energy-efficient improvements. Borrowers may use the EEM program to finance the cost of energy efficient improvements into their new mortgages, without the need to qualify for additional financing, because cost effective energy improvements result in lower utility bills making more funds available for their mortgage payments.
Please use the following links to learn more:
https://www.hud.gov/program_offices/housing/sfh/eem/energy-r
https://www.hud.gov/program_offices/housing/sfh/eem/eemhog96
https://www.energystar.gov/ia/partners/bldrs_lenders_raters/EEM_Fact_Sheet.pdf