'Green' house effect: Use an Energy Efficient Mortgage to build dream eco-friendly home

With Utah's housing market experiencing its shares of ups and downs, some homeowners and prospective buyers might consider looking for ways to enhance their current or future investments as the case may be.

Couple that with the high cost of maintaining a home — paying for utilities and environmental concerns — then one might be led to consider little-known options like buying a house that is eco-friendly or revamping your home into a "green" house using an Energy Efficient Mortgage (EEM).

Federally recognized, EEMs provide borrowers with benefits when they purchase "a home that is energy efficient or can be made efficient through the installation of energy-saving improvements," according to the Federal Citizen Information Center Energy Efficient Mortgage Home Owner Guide.

EEMs can also be applied to most traditional home mortgages, increasing monthly mortgage payments slightly, but that money can be recouped through lower energy bills. Homeowners who are buying/selling, refinancing or remodeling can use EEMs, which can help buyers qualify for larger loans, make homes potentially more attractive at resale and help owners save money in the long run through increased energy efficiency. It is important to note that under federal rules governing the program, an EEM can only be made on a home that has a qualifying Home Energy Ratings Systems (HERS) report.

A HERS report includes suggested home energy upgrades, estimated costs and annual savings before and after upgrades, expected useful life of upgrades as well as overall rating scores before and after improvements. Rating scores are between 1 and 100 with higher scores indicating better efficiency. A HERS rating exam typically costs $100-$300. EEM loans are available through various sources including the Federal Housing Authority (FHA), Veterans Affairs (VA) EEMs, Fannie Mae and Freddie Mac.

Energy efficient loans aren't all that's being specialized in this market. Andrew Stone recently received his certification as an eco-broker. To do so, he completed a curriculum on numerous subjects such as solar and wind energy, as well as rainwater retention systems and indoor air quality.

Stone said his knowledge can be of great help to people who might be interested in eco-friendly homes. "I'm working to get together with other green-minded people (lenders) and network with green builders so that we have some backing and a larger group of (real estate) people so that when I come upon clients who are interested, I can have people to send them to," Stone said.

But since becoming certified earlier this year, Stone has yet to make his first green sale, which may, in part, be a function of a slowdown in the overall housing market.