The Energy Efficient Mortgage Loan program helps current or potential homeowners significantly lower their monthly utility bills. Energy efficient improvement costs can be incorporated into an FHA loan.

FHA Loan Rates

September 4, 2015
FHA Rates for September 4, 2015
Offering 30 Year Fixed Mortgages
Offering 15 Year Fixed Mortgages
Use our mortgage calculators
to see what you can afford!
FHA.com is a private company, is not a government agency, and does not make loans.

Prequalify Now!

Compare mortgage rates for your refinance or home purchase loan.

CHOOSE A LOAN TYPE

then
get
your

FREE CREDIT SCORE

Do you know what's on
your credit report?
FHA.com is a private company, is not a government agency, and does not make loans.

Energy Efficient FHA Loans

Incorporate Improvements Into Your Loan

The Energy Efficient Mortgage Loan program helps current or potential homeowners significantly lower their monthly utility bills by enabling them to incorporate the cost of adding energy efficient improvements into their new home or existing housing. This FHA program eliminates the need for homeowners who are interested in making their home more energy efficient to take out an additional mortgage loan to cover the cost of the improvements they intend to make to their property. The program is available as part of a FHA insured home purchase or by refinancing your current mortgage loan.

It is our government's goal to make energy efficiency and conservation a way of life. The FHA Energy Efficient Mortgage Loan program contributes to these efforts by providing better housing and creating a way for homeowners to make valuable improvements to their homes at a relatively low cost. The Joint Center for Housing Studies has reported that by considering the amount of monthly savings on utility bills when determining the amount of the mortgage, over 250 thousand more homeowners could feasibly qualify for a home loan.

HOW IT WORKS

Through this and other types of mortgage insurance programs, the lender helps low and moderate-income families purchase homes by keeping the initial costs down. By serving as an umbrella under which lenders have the confidence to extend loans to those who may not meet conventional loan requirements, FHA mortgage insurance allows individuals to qualify who may have been previously denied for a home loan by conventional underwriting guidelines. It also protects lenders against loan default on mortgages for properties that include manufactured homes, single-family and multifamily properties, and some health-related facilities.

AVAILABLE ASSISTANCE

The Energy Efficient Mortgage Loan program is one of many FHA programs that insures mortgage loans. Borrowers who qualify for FHA's popular Section 203(b) fixed-rate mortgage loan may finance up to 97 percent of their home loan. They are also able to fold their closing costs and the up-front mortgage insurance premium into the total cost of the loan. Energy Efficient Mortgages can also be used with FHA Section 203(k) rehabilitation program; in this case the Energy Efficient Mortgage generally follows the Section 203(k) rehabilitation program's financing guidelines.

ELIGIBILITY

The Energy Efficient Mortgage Loan program is available to anyone who meets the income requirements for FHA's Section 203(b) and is able to make the monthly mortgage payments. The cost involved in adding energy efficient features to the home and an estimate of the energy savings must be determined by a home energy rating system or a qualified energy consultant. Up to $200 of the cost of the energy inspection report may be included in the mortgage. Cooperative units are not eligible. Individual condominium units may be insured if they are not in projects that have been approved by FHA or the Department of Veterans Affairs, or they meet certain Fannie Mae guidelines.

ELIGIBLE ENERGY EFFICIENT ACTIVITIES

Energy Efficient Mortgages can be used to make energy-efficient improvements in one- or two-unit existing and new homes. The improvements can be included in a borrower's mortgage only if their total cost is less than the total dollar value of the energy that will be saved during their useful life. The cost of the improvements that may be eligible for financing as part of the mortgage is either 5 percent of the property's value (not to exceed $8,000) or $4,000, whichever is greater. View the current FHA loan limits.

FHA Loan Articles

Read About Mortgage News, FHA Updates, and Guidelines
Steps Toward Your FHA Home Loan

What are the steps toward completing your purchase of a home using an FHA mortgage? It’s a common question and one first-time home buyers might be afraid to ask, not wanting to seem ignorant of the process.

FHA Loan Rules For Second Home Purchases

FHA loan rules for the single-family loan program are designed for owner-occupiers, but depending on circumstances a borrower may be approved by a participating lender to buy another home--usually in response to a pragmatic need like a larger family or job requirements.

FHA Announces Changes to Due and Payable Policies

In the past two years, the FHA Home Equity Conversion Mortgage Loan program has seen a number of changes. New changes cooncern the circumstances under which a HECM loan becomes due and payable and what happens at that time.

What You Need to Know About Your FHA Down Payment

Many financial writers and industry professionals urge new house hunters to start working on credit, good payment habits and other loan prep activities at least 12 months before turning in an application for the FHA mortgage.

Changes in Home Equity Conversion Mortgages for 2015

Home Equity Conversion Mortgages are the FHA version of a reverse mortgage. These loans allow qualified borrowers age 62 and older to apply for a loan against the value of a home owned either outright or very close to being paid off.