ENERGY STAR offers information on mortgage lending programs that include the cost of energy efficiency investments in the loans themselves so that borrowers can pay for those investments over the life of their loans, as well as possibly deduct the interest from their federal and state income taxes. These programs include:
Energy-Efficient Mortgages (EEMs) give borrowers the opportunity to finance cost-effective, energy-saving measures as part of a single mortgage and stretch debt-to-income qualifying ratios on loans thereby allowing borrowers to qualify for a larger loan amount and a better, more energy-efficient home. To get an EEM a borrower typically has to have a home energy rater conduct a home energy rating before financing is approved. This rating verifies for the lender that the home is energy-efficient.
EEMs are typically used to purchase a new home that is already energy efficient such as an ENERGY STAR certified home. There are various types of EEMs, including Conventional, FHA and VA programs.