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.
Still, Stone remains undeterred. He said more and more people are becoming aware of EEMs. "A lot of people are saying, 'Hey, I can refinance my home and make all these upgrades right away.'" He said he is working prospective buyers to look at purchasing existing homes and informing them of resources available to make green upgrades, including some conventional loans he said will allow homebuyers to borrow up to 115 percent of a home's value for energy efficiency improvements.
Some local developers are also thinking green when designing and constructing houses that utilize space, light and energy in a much more efficient fashion. Scott Hinton, principal owner of H Space Design Build in Salt Lake City, said there are a number of ways to improve the efficiency of a home without breaking the bank. His company is currently finishing up construction of a home in the Liberty Park area that is approximately 2,100 square feet utilizing radiant heat and recirculated air to provide increased efficiency and comfort. While a home (which already sold for $400,000) would not be as warm in very cold weather or as cool during the warmest months using this technology solely, when used in conjunction with a high-efficiency furnace and air conditioner, it reduces utility costs substantially.
Hinton said the home also makes use of natural lighting and other design aspects that enhance everyday living, including a tankless water heater that provides an endless supply of on-demand hot water by only heating water when it is used, such as for bathing, laundry, dishwashing, etc. This outside of the home has xeriscape landscaping and a roof constructed of energy efficient materials, including a garden area that also enhances overall efficiency.
For more information on Energy Efficiency Mortgages visit: www.pueblok.gsa.gov/cic_text/housing/energy_mort/energy-mortgage.htm
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