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The best part of the FHA's Energy Efficient Mortgage is that the borrower isn't required to qualify for the extra money needed to include the energy upgrades, and there is no down payment required for the extra amount.

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August 21, 2018
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What About FHA Loan Guidelines? (part two)

FHA Common Question #26

In addition to the other types of FHA loan guidelines that pertain to specific types of purchases such as a fixer-upper home or a mobile home, there is also a special kind of FHA guideline pertaining to loans for energy efficient homes. This kind of FHA loan is called the Energy Efficient Mortgage, also known as EEM. It provides mortgage insurance for the borrower to buy or refinance a residence and include the cost of energy-saving upgrades in the amount.

The best part of the FHA's Energy Efficient Mortgage is that the borrower isn't required to qualify for the extra money needed to include the energy upgrades, and there is no down payment required for the extra amount. The rationale behind this kind of FHA loan is that by saving money on utilities, the borrower can afford to make higher payments, or get a larger loan based on those savings. Anyone concerned about the environment, saving money or just getting the most efficient home they can afford should seriously consider the EEM.

While the FHA has these programs, most FHA lenders either choose not to participate in them or have additional qualifying overlays which are more stringent than the FHA. It is not mandatory for an FHA lender to offer certain products and you should contact each lender to see if they offer the product you need.

NEXT:  How Do I Get an Energy Efficient Mortgage?

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FHA Loan Articles and Mortgage News

How Should I Use My FHA Cash-Out Refinance Money?

August 12, 2018 - FHA cash-out refinance money is good for any purpose the borrower wants to use it for; the cash-out refi loan is different in that respect than a refinance loan to rehab a house (FHA 203(k) loans, for example) or to purchase and rehab a home.

Is the Cash I Need To Close My Loan Included in the Down Payment?

August 9, 2018 - FHA home loans feature a minimum required investment, also known as a down payment, of 3.5% of the adjusted value of the home. This down payment is required for new purchase FHA mortgages. The FHA home loan origination fee is another expense charged to the borrower.

FHA Mortgages vs. Conventional Loans

August 6, 2018 - Why should borrowers consider an FHA mortgage over a conventional loan? There are many reasons why-some are situational, others may come down to how much the house hunter wants to budget for a down payment.

How to Remodel Your Home With an FHA Mortgage

August 4, 2018 - The first thing to think about before you start getting ready to apply for an FHA mortgage to refinance and remodel is how old your current mortgage loan is. The longer you have been making payments, the more buying power you might have with a new loan.

FHA Loan Tip: What a Home Inspection Tells You

August 3, 2018 - The home inspection on the property you buy with your FHA mortgage is something you the borrower must arrange and pay for. It covers the roof, the basement, crawl space, the mechanical systems of the home, foundation, and much more.

FHA.com Reviews

FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!