More and more families are making environmental improvements to their homes. From something as simple as switching to fluorescent light bulbs, to more serious upgrades like replacing old drafty windows with double pane ones, “green” improvements can save power and money.
Military families may have a resource available to them called Energy Efficient Mortgages (EEMs) that can help finance such energy-saving improvements.
An EEM is a kind of VA-backed mortgage that is used to pay solely for energy efficiency upgrades for residential property and can be added to a new or existing VA loan. The EEM is considered part of the total loan that the VA guarantees. EEMs can be included with the following types of mortgages:
- VA purchase loan
- VA refinance loan (including Streamlines)
The VA mortgage can be increased with EEMs by the following amounts:
- Up to $3,000 based only on the costs of “green” improvements, or
- Up to $6,000 if the increase in monthly mortgage payment does not exceed the anticipated reduction in monthly utility costs, or
- More than $6,000 based on a valuation by the VA
The EEM funds are to be used for actual labor and materials costs of green upgrades. Do-it-yourselfers may not pay themselves out of the funds obtained through the EEM program.
The VA guidelines state that the lender can roll EEM improvements into the VA home loan even if the work has already been completed within the past 90 days.
Some examples of energy efficient upgrades that can be funded by EEM include:
- Replacing old furnace with an energy efficient one
- Installing solar panels to power heating or cooling
- Mounting programmable thermostats that can automate heating and cooling times
- Blowing in more insulation
- Adding storm windows and doors, or replacing old windows with new “green” ones
- Adding an attached garage or insulated garage door
- Installing heat pumps
EEM funds may not be used for the following:
- New roof or shingles
- Vinyl siding
- Cooling units (unless veteran has a certified medical need for temperature controlled environment)
- Glass blocks for windows or decoration
For more information about EEMs, contact a VA-approved lender.
Ashleigh Downing is the Social Media Director for iFreedom Direct. She has been working with and writing about veteran’s benefits and issues for the past three years.
iFreedom Direct is a top national VA lender that specializes in assisting active members and retired veterans of the Armed Forces with VA loans.