Energy Efficient Mortgage

Whether you would like to purchase a new energy-efficient home or upgrade an existing one, a Fannie Mae HomeStyle Energy Mortgage* can provide helpful loan and refinance options. This type of EEM allows approved borrowers to buy an energy-efficient home or to pull cash out of their home’s equity access funds for a wide variety of energy-efficient projects—from repairs and upgrades to landscaping and more. Just as with a regular mortgage, there are monthly payments to the lender.

This type of loan can be used for energy-efficient improvements and eco-friendly renovations such as the following:

• Water efficiency devices.
• Renewable energy sources such as solar panels, wind power devices and geothermal systems.
• Storm surge barriers.
• Foundation retrofitting for earthquakes.
• Hazardous brush and tree removal in fire zones.
• Retaining walls to address mud and water flows.
• Weatherization for air sealing, insulation, windows, doors and more.
• Radon remediation.

An Energy Efficient Mortgage has several benefits including: 

• Pay off higher-interest energy-related improvement debt, including PACE loans.
• No additional closing docs or disclosures required.
• Get a mortgage loan for up to 115% of the future appraised value of your home.

This EEM program follows standard FNMA guidelines and includes the following loan requirements:

Renovation of existing property to make energy-related improvements

• For purchase or Limited Cash-Out Refinance transactions.
• Up to 15% of the “as-completed” appraised value of the property.

Payoff of existing PACE loan

• For purchases or Limited Cash-Out Refinance transactions.
• Pay off higher-interest energy related improvement debt including PACE loans.
• All outstanding PACE debt may be paid off up to the maximum allowable LTV for the transaction and occupancy type.

Payoff of non-PACE secured or unsecured debt that financed energy related improvements

• For Limited Cash-Out Refinance transactions.
• Up to 15% of appraised value of the property.

Financing Options

• Various Fannie Mae fixed-rate loan options available.
• Purchase and Limited Cash-Out Refinance transactions permitted.
• High balance permitted.

Property Improvements

• Can be for water efficiency, renewable energy, radon remediation, resiliency and energy repairs.
• Up to $3,500 in weatherization items allowed with no energy report.
• No minimum dollar cap for improvements and the maximum dollar amount will be determined by the type of EEM financing option.
• No additional disclosures or closing docs required.
• Must be completed within 180 days of the date of the mortgage note.
• Can be used in conjunction with HomeStyle Renovation for energy-related improvements that exceed the EEM allowable.

Eligible Properties

A variety of property types are supported with a HomeStyle Energy Mortgage:

• 1-4 unit principal residence.
• 1-unit second home.
• 1-unit investment property.
• New or existing properties.
• Manufactured homes.
• Condos, and PUDs.

As a Fannie Mae approved lender, New American Funding offers fixed 15- or 30-year fixed-rate mortgages for purchasing, Limited Cash-Out Refinancing and high balances.

An Energy Efficient loan can help you meet your energy efficiency needs, enhance the value of your home and save you money on utility costs. To find out more, contact a trusted New American Funding Loan officer today!