Wanna do something good for the environment and save some dough? 🌍💸 Want to do something about climate change that doesn't involve throwing a can of soup at the Mona Lisa? 😆 Well, let us tell you a little something about…green mortgages!
A green mortgage (or EEM) allows you to buy a new energy-efficient home or upgrade your current one. 🏡 An eco-friendly dwelling doesn't just make Mother Earth happy. Long term, it'll save you big on utility bills!
Here’s Five Fast Facts about green mortgages:
- 🏘️ Flipping Fun - If you're house hunting, use an EEM to buy an older home and remodel it with energy-efficient features. Want a new home instead? A green mortgage can also be used to buy new construction that's Energy Star certified. Already have a home? Apply for an EEM to borrow up to 15% of your home’s appraised value to add green improvements.
- 📋 Check Those Boxes - Before you're officially approved for your EEM, you'll most likely need to hire an energy consultant. They'll verify that the improvements you're looking to make meet energy-efficient standards. Then, the results go to your mortgage company.
- 🌎 Pretty Conventional - Green mortgages come in a few different flavors. A conventional EEM requires at least a 3% down payment of the purchase price. If you need more money for remodeling, you can borrow up to 15% of the as-completed value of the property to foot the bill. FreddieMac GreenCHOICE Mortgage and Fannie Mae HomeStyle Energy Mortgage are your two main options.
- 🔋 Good Energy - The Federal Housing Administration also has an EEM program. Qualified borrowers can add additional funds that are less than the cost of the energy-efficient improvements or less than 5% of any of the following: the adjusted value, 115% of the median area price of a single-family dwelling or 150% of the national conforming mortgage limit. Bonus: you'll only need to qualify for the cost to purchase the home. Any additional funds aren't subject to FHA requirements.
- 🫡 Salute Your Shorts - For veterans, current service members, and spouses, a VA-backed EEM may be an option. Word on the street says it's hard to get approval for upgrades that cost more than $6,000, and you'll need both your mortgage lender and the VA's OK. Also, you might be bummed to find out that your project isn't covered, like a new roof and Energy Star-rated appliances.
🔥Bottom line: Just like a regular mortgage, qualifying for a green mortgage means you'll need to have a good credit score. Make sure it's in tip top shape so you get the best rates! Did you know you could be hurting your credit score and not even know it? This article shows you all the sneaky ways it could happen.
Would you take out a green mortgage?
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