Did you know that, as part of a Veterans Administration (VA) loan, you can receive a special mortgage offer to make energy improvements in your home?
It’s called an Energy Efficient Mortgage (EEM), an opportunity to create valuable cost-saving opportunities within your home and reduce your utility bills.
VA loans are available to active-duty military members, reservists and veterans.
Here is a partial list of enhancement you can make to your home through the EEM program:
- Solar heating systems, including solar systems for heating water for domestic use
- Solar heating and cooling systems
- Caulking and weather-stripping
- Furnace efficiency modifications limited to replacement burners, boilers, or furnaces designed to reduce the firing rate or to achieve a reduction in the amount of fuel consumed as a result of increased combustion efficiency
- Devices for modifying flue openings which will increase the efficiency of the heating system
- Electrical or mechanical furnace ignition systems which replace standing gas pilot lights
- Clock thermostats
- New or additional ceiling, attic, wall and floor insulation
- Water heater insulation
- Storm windows and/or doors, including thermal windows and/or doors
- Heat pumps
- Vapor barriers
How much money you can receive through an EEM depends on the circumstances.
You can have up to $3,000 based solely on the documented costs. However, you can access up to $6,000 provided the increase in monthly mortgage payment does not exceed the likely reduction in monthly utility costs.
If you require more than $6,000, you will need the VA to examine the situation and make a ruling.
I helped a client purchase a home through a VA loan, and the client also took advantage of the EEM program to finance new windows into the loan.
That means the client paid for the windows as part of the monthly mortgage payment. The cost of the windows is rolled into the loan.
Does an EEM make sense for you? If you are eligible for a VA loan, think hard about the energy updates you would like to make to your new home. The upgrades may be easier to obtain than you think.