Making your home more energy efficient with ENERGY STAR can help to reduce high energy bills, improve comfort and help to protect the environment. Improving energy efficiency is also an important first step for homeowners interested in green remodeling. ENERGY STAR can guide you in making your home more efficient — whether you do-it-yourself or hire a qualified professional.
Homes that meet the ENERGY STAR rating are eligible for Energy Efficient Mortgages. An Energy Efficient Mortgage (EEM) is a mortgage that credits a home's energy efficiency in the mortgage itself. EEM’s 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 earn the ENERGY STAR label, a home must meet guidelines for energy efficiency set by the U.S. Environmental Protection Agency. These homes are at least 15% more energy efficient than homes built to the 2004 International Residential Code (IRC), and include additional energy-saving features that typically make them 20–30% more efficient than standard homes.
The Energy Star EEM program is intended to demonstrate that financing can be a successful tool for lenders and borrowers to promote whole-house energy-efficiency improvements, and that utilizing qualified contractors and energy auditors is key to achieving real-world energy savings.
In addition to the energy saving and tax credits participating lenders must provide their customers with a "net benefit" cost advantage, such as an interest-rate discount, reduced loan fees, closing-cost assistance or another benefit that reduces the cost of the mortgage compared with the financing package that would otherwise be available to that borrower.
Any person who is an owner or purchaser of a single-family home — defined as a one-to-four-family, owner-occupied home — may use an ENERGY STAR Mortgage offered by a participating lender. The program is available to borrowers at all income levels, including lower-income families, for whom the government may bundle available public subsidies to achieve even greater cost savings.
Resources:
EnergyStar.gov