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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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December 13, 2019
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FHA.com is a privately owned website, is not a government agency, and does not make loans.

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

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Problems That Can Delay Your FHA Home Loan (Part One)

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FHA Loans in 2020: Pay Attention to Your Debt-To-Income Ratio

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