Tuesday, May 31, 2011

Did you know about HUD's Energy Efficient Mortgage Program

Energy Efficient Mortgage Program
FHA's Energy Efficient Mortgage program (EEM) helps homebuyers or homeowners save money on utility bills by enabling them to finance the cost of adding energy efficiency features to new or existing housing as part of their FHA insured home purchase or refinancing mortgage.
In 1992, Congress mandated a pilot demonstration of Energy Efficient Mortgages (EEMs) in five states. In 1995, the pilot was expanded as a national program.
EEMs recognize that reduced utility expenses can permit a homeowner to pay a higher mortgage to cover the cost of the energy improvements on top of the approved mortgage. FHA EEMs provide mortgage insurance for a person to purchase or refinance a principal residence and incorporate the cost of energy efficient improvements into the mortgage. The borrower does not have to qualify for the additional money and does not make a downpayment on it. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, or savings and loan association, and the mortgage is insured by HUD. FHA insures loans. FHA does not provide loans.

Type of Mortgage:
EEM is one of many FHA programs that insure mortgage loans--and thus encourage lenders to make mortgage credit available to borrowers who would not otherwise qualify for conventional loans on affordable terms (such as first time homebuyers) and to residents of disadvantaged neighborhoods (where mortgages may be hard to get). Borrowers who obtain FHA's popular Section 203(b) Mortgage Insurance for one to four family homes are eligible for approximately 96.5 percent financing, and are able to add the upfront mortgage insurance premium to the mortgage. The borrower must also pay an annual premium.
EEM can also be used with the FHA Section 203(k) rehabilitation program and generally follows that program's financing guidelines. For energy efficient housing rehabilitation activities that do not also require buying or refinancing the property, borrowers may also consider HUD's Title I Home Improvement Loan program.

How to Get a EEM:
To apply for an FHA insured energy efficient mortgage, contact an FHA approved lender.

Eligible Customers:
All persons who meet the income requirements for FHA's standard Section 203(b) insurance and can make the monthly mortgage payments are eligible to apply. The cost of the energy improvements and estimate of the energy savings must be determined by a home energy rating system (HERS) or an energy consultant. The cost of an energy inspection report and related fees may be included in the mortgage. Cooperative units are not eligible.
EEM can also be used with FHA's Section 203(h) program for mortgages made to victims of presidentially declared disasters. The mortgage must comply with both Section 203(h) requirements, as well as those for EEM. However, the program is limited to one unit detached houses.
Eligible Activities:
EEM can be used to make energy efficient improvements in one to four existing and new homes. The improvements can be included in a borrower's mortgage only if their total cost is less than the total dollar value of the energy that will be saved during their useful life. Other eligibility requirements may be found in the Homeowner's Guide.
Eligibility Requirements

 -  The borrower is eligible for a maximum FHA insured loan, using standard underwriting procedures. The borrower must make a 3.5 percent downpayment. This 3.5 percent downpayment is based on the sales price or appraised value. Any upfront mortgage insurance premium can be financed as part of the mortgage.
 -  Eligible properties are one to four unit existing and new construction. EEMs may be added to some other loan types, including streamline refinances.
The cost of the energy efficient improvements that may be eligible for financing into the mortgage is the lesser of A or B as follows:
A. The dollar amount of cost-effective energy improvements, plus cost of report and inspections, or
B. The lesser of 5% of:
  • The value of the property, or
  • 115% of the median area price of a single family dwelling, or
  • 150% of the conforming Freddie Mac limit.
 -  To be eligible for inclusion in the mortgage, the energy efficient improvements must be cost effective, meaning that the total cost of the improvements is less than the total present value of the energy saved over the useful life of the energy improvement.
 -  The cost of the energy improvements and estimate of the energy savings must be determined by a home energy rating report that is prepared by an energy consultant using a Home Energy Rating System (HERS). The cost of the energy rating report and inspections may be financed as part of the cost effective energy package.
 -  The energy improvements are installed after the loan closes. The lender will place the money in an escrow account. The money will be released to the borrower after an inspection verifies that the improvements are installed and the energy savings will be achieved.
 -  The maximum mortgage limit for a single family unit depends on its location, and it is adjusted annually. Look online to find FHA's maximum mortgage limits by county.
Technical Guidance:
EEM is authorized under Section 513 of the Housing and Community Development Act of 1992. Program regulations are listed on the EEM mortgagee letter web page.
For More Information:
Visit the FHA Resource Center to search the FAQs, ask a question or send an email.

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My Supplier Options from BGE.com

The Office of People’s Counsel provides information on:

Ambit Energy
1801 N. Lamar Street
Suite 200
Dallas, TX 75202
Toll-Free: 877.282.6248
BGE Home
1409-A Tangier Drive

Baltimore, MD 21220
Toll-Free: 888.243.4663
BTU Energy, LLC
1414 Key Highway
Suite G
Baltimore, MD 21230
Toll-Free: 866-229-4902
Castlebridge Energy Group, LLC
1414 Key Highway
Suite L
Baltimore, MD 21230
Toll Free: 866.229.4902
Clean Currents, LLC
155 Gibbs St.
Suite 425
Rockville, MD 20850
Phone Number: 410.344.5017
Commerce Energy, Inc.
1 Centerpointe Drive
Suite 350
La Palma, CA 90623
Toll-Free: 877.226.7439
Consolidated Edison Solutions, Inc.
100 Summit Lake Drive

Valhalla, NY 10595-1356
Toll Free: 877.238.2143
Constellation Electric
1409-A Tangier Drive

Baltimore, MD 21220
Toll-Free: 1-888-219-4239
CQI Associates, LLC
Maryland Residential Energy Purchasing Co-op
P.O. Box 825
Columbia, MD 21044
Phone: 410.740.0667
Direct Energy Services
7385 North State Route 3
PMB 51
Westerville, OH 43082
Toll-Free: 1.888.200.7930
Dominion Energy Solutions
P.O. Box 298

Pittsburgh, PA 15230
Toll-Free: 866.303.9669
Energy Plus Holdings, LLC
3711 Market Street
Suite 1000
Philadelphia, PA 19104
Toll-Free: 877-580-3915
Gateway Energy Services Corporation
400 Rella Boulevard
Suite 300
Montebello, NY 10901
Toll-Free: 800.805.8586
Horizon Power and Light, LLC
800 Bering Drive
Suite 250
Houston, TX 77057
Toll-Free: 866.727.5658
IGS Energy
6100 Emerald Pkwy

Dublin, OH 43016
Toll Free: 800.280.4474
Maryland Energy Advisors LLC
P.O. Box 1051

Cockeysville, MD 21030
Toll-Free: 888.826.1316
P.O. Box 4911

Houston, TX 77210
Toll-Free: 888.898.4323
NextEra Energy Services MD, LLC
20455 SH 249
Suite 200
Houston, TX 77070
Toll-Free: 800.882.1276
North American Power
1 Marshall Street
Suite 205
Norwalk, CT 06854
Toll-Free: 888.313.9086
NOVEC Energy Solutions, Inc
10323 Lomond Drive

Manassas, VA 20108
Oasis Energy
11152 Westheimer
Suite 901
Houston, TX 77042
Toll-Free: 800.324.3046
Planet Energy (Maryland) Corp.
United Corporate Services Inc.
800-10 Kingsbridge Garden Cir.
Mississauga, ON (Canada) , L5R 3K6
Toll Free: 855.360.3047
Public Power & Utility of MD
7 St. Paul Street
Suite 1660
Baltimore, MD 21202
Toll Free: 888.354.4415
Spark Energy, LP & Spark Energy Gas
2105 City West Boulevard
Suite 100
Houston, TX 77042
Electric: 800.411.4387, Gas: 800.411.4389
Starion Energy PA Inc.
220 Main Street South
Suite 206
Southbury, CT 06488
Toll-Free: 800.600.3040
Stream Energy
6701 Democracy Blvd
Suite 300
Bethesda, MD 20817
Toll Free: 1-877-369-8150
Viridian Energy
64 N. Main Street

Norwalk, CT 06854
Toll-Free: 866.663.2508
Washington Gas Energy Services
13865 Sunrise Valley Drive
Suite 200
Herndon, VA 20171-4661
Toll-Free: 888.884.9437