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 mortgage information        10 commandments for loan applicants          loan pre-qualification         energy efficient mortgages         FAQs         green mortgage sources          mortgage checklist         cheers / pace          back to top



Getting pre-qualified for a home loan is an essential first step in the buying process. Find out exactly how much home you can afford based on your income, debt, & other factors. It can also help you lock in a good interest rate & it puts you in a stronger bargaining position once you find the home of your choice.


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  • Thou shalt NOT change jobs, become self-employed or quit your job
  • Thou shalt NOT buy a car, truck, or van (or you may be living in it)
  • Thou shalt NOT use charge cards excessively or let your accounts fall behind
  • Thou shalt NOT spend money you have set aside for closing costs
  • Thou shalt NOT omit debts or liabilities from your loan obligation
  • Thou shalt NOT buy furniture
  • Thou shalt NOT originate any inquiries into your credit
  • Thou shalt NOT make large deposits without 1st checking with your loan officer
  • Thou shalt NOT change bank accounts
  • Thou shalt NOT co-sign a loan for anyone else



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The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. 
DSIRE is a comprehensive source of information on state, federal, local, and utility incentives and policies that support renewable energy and energy efficiency. Established in 1995 and funded by the U.S. Department of Energy, DSIRE is an ongoing project of the North Carolina Solar Center and the Interstate Renewable Energy Council, Inc  



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  •  Up to $8,000 + for 'cost effective'** improvements
  • Higher Loan Limits - 3% down
  • Protects Value of your Home
  • Qualify for a bigger home

An Energy Efficient Mortgage calculates the increase in your cash flow and allows you to qualify for a larger mortgage that includes both costs. Modern Earth Finance presents a typical scenario following.


Laura and Jack buy a house and need $7,000 for energy efficient repairs. They add the cost of improvements to their loan. They have a higher mortgage payment but save money each month by significantly reducing their utility costs.

Standard Mortgage EEM Mortgage

Purchase Price $250,000 $250,000

Down Payment $15,000 $15,000

Balance $235,000 $235,000

Add repair costs 0 $7,000

Total Loan $235,000 $242,000

Monthly payment* $1,408 $1,450

Monthly utility costs $188 $94

Monthly Total $1,596 $1,544

Monthly EEM savings  $ 52

Annual savings  $ 624

*interest 6% for example. Rates subject to change. Actual results may vary. Owner occupied, primary residence. ** The value of energy saved must be greater than cost of improvements.



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Frequently Asked Questions

About Energy Efficient Mortgages (EEM)

Q: What is an Energy Efficient Mortgage?
A: The Energy Efficient Mortgage is a home financing program, sponsored by the Federal Government, which allows a lender to recognize cash savings from energy efficiency. The lender can then lend additional funds to either:

  1. pay for energy upgrades on a home needing them, or
  2. stretch debt-to-income qualifying ratios to allow a loan applicant a larger loan on an energy efficient property.

Q: What is the benefit in using the EEM?
A: With the EEM you can qualify for a better home than was previously possible, make your money work harder than before and make the most out of your investment. You get comfort, savings and an overall better home.

Q: How does it work?
A:There are two options with the EEM:

  1. Get energy improvements financed through the mortgage on a home that needs some upgrades. You pay for the upgrades easily, at a low interest rate, through the mortgage.
  2. If you buy a home that is already efficient (it is fairly new, or it has had substantial upgrades in the past), the lender can "stretch" your debt to facilitate a larger mortgage.

Q: What kinds of loans can this be applied to?
A: The EEM can be done on government, conventional, and Jumbo financing, or for FHA, VA, Fannie Mae, Freddie Mac, Jumbo and Portfolio loans. It can be done on home purchases, refinances and second deeds of trust. It can be done for homes of virtually any price, both the least expensive and the most expensive, and everything in between. It must be a residence of from one to four units.

Q: How long has the EEM been available?
A: Since 1979, but the EEM has only recently come to public attention; consumers have not demanded it because they haven't known about it. Most lenders and Realtors are not fully aware of it, and those that are have only been offering it for a short time. The lenders have not been advertising it because they mistakenly do not see a great public demand for it.

Q: Where is the EEM available?
A: Nationwide. However, not all lenders are actively offering it, so it may seem to be unavailable in some areas. Make sure you double-check with you mortgage lender.

Q: How do I go about getting an EEM?
A: Talk with CHEERS® and we will help you through the entire process.

Q: Who pays for the energy upgrades?
A: The lender initially funds the upgrades by adding money right into the mortgage. The energy savings themselves pay for the upgrades, because the total payments of mortgage and utilities combined is less than if the upgrades had not been done.

Q: My Realtor told me that I shouldn't bother with the EEM because it would only mess up my deal. Will it?
A: No. The EEM is designed to help the buyer by adding benefits on top of the regular mortgage deal. If the house qualifies for energy improvements, they are added through the mortgage, as an added feature. If no energy improvements are necessary, the lending and buying process continues as usual.

Q: Can we use the EEM if we are not buying or refinancing a home at this time?
A: No. The EEM is a mortgage tool, and must be written into the mortgage documents. However, you can use a HERS Rating in conjunction with other financing. The HERS recommendations could be included in other remodeling plans to produce a more comfortable home.

Q: I asked a lender about the EEM a while ago and they said they had never heard about it. How do I know it really exists?
A: The Energy Efficient Mortgage was created by the Federal Government about 18 years ago. It is recognized by FHA, VA, Fannie Mae, and Freddie Mac. It is supported and recommended by all major utilities and state and local governments throughout the nation.

Q: Why didn't my other lender or my Realtor know about it?
A: Though the EEM has been around for some time, Realtors and lenders have only become aware of it in the past two or so years. Until HERS programs came on the scene a few years ago, there was no convenient way to get the information needed meet EEM requirements.

Q: I'm not buying or selling my home now, but I want to remodel. Can this help me?
A: Yes it can. You can actually make your entire home more economical if you include energy efficiency in your remodel plans. A HERS Rating will tell you what energy items you should address. Then you can choose how you will pay for the entire job. You could use cash or credit, or refinance your home using the Energy Efficient Mortgage.

Q: The house I want needs a new roof. Can I fund it through the EEM?
A: Probably not. The HUD 203(k) may be of help in funding the structural repairs and the EEM may help you get needed energy improvements. If the house has a framed roof with no attic, the EEM may be able to fund the new roof if new insulation is also called for. The HERS Rating will indicate what is needed.

Q: We are renters. How can HERS and EEMs help us?
A: They can help you become a homeowner by making it easier to qualify for a home loan.

Q: I'm not a low-income person. Can I still get an EEM?
A: Yes you can. You would need to have a rating done on the home and to work with a lender who offers the EEM.

Q: Who does the installation work after the loan is funded?
A: It is up to the lender to make sure all the improvements are done. It is their legal responsibility. Sometimes the homeowner can do it himself or herself, but usually the consumer will employ a contractor to do the work.

Q: What if we just want to do the work ourselves?
A: Usually the lender requires that the work for an Energy Efficient Mortgage be done by a licensed and bonded contractor.

Q: Why do utility companies support the EEM if it helps people save energy?
A: Energy resources are becoming scarce and expensive. Utility companies still have to meet the needs of the public, industry, business, and agriculture. It is less costly to meet the demand for energy by helping people be more efficient than to build more power plants. This way, there will still be enough energy to go around, but less pollution and less waste.

Q: Is this EEM the same program my utility company did for me a few years ago when they insulated everyone's home and asked us questions about our energy?
A: Most likely it isn't. Many people have benefited from those programs, and some homes even had free HERS Ratings done. But those programs only helped the current occupants to conserve their energy. They were not intended to help people when they are buying their homes. The EEM is a loan package which is worked out between the lender and the buyer, to give the buyer a better home.

If the question you want to ask isn't answered here, please contact CHEERS®.



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Green Finance Insider

Green Finance Insider | 700 Larkspur Landing Circle | Suite 275 | Larkspur | CA | 94939 (415) 461-8080


GoGreen Lending


Contact Victor Orozco / (714) 2 20-8366 / Certified Sustainable Building Advisor / Certified Green Building Professional

Farm Credit



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Here is a list of information and documents you will need when you apply for a loan:

  • Copy of the Purchase Agreement / Sales contract
  • Your present mortgage information or 12 months rental history
  • Two years history of employment and verification of all income sources
  • If self-employed, copies of past 2 years income tax return and year to date profit and loss statement
  • Two months checking, savings, and investment account information
  • Name, account number & outstanding balance of each of your debts (credit cards, lines of credit, etc.)
  • Information regarding any other income to be used
  • Information regarding any other assets that will be used as funds to close
  • If applying for a VA loan, a Certificate of Eligibility or DD-214 form
  • If a relocating employee, include re-lo information and a copy of offer, promissory note, and copy of check on bridge loan
  • Two pieces of ID such as Driver's License, Passport, or Social Security Card


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CHEERS - California Home Energy Efficiency Rating System

Click Logo or Link above

PACE - Property Assessed Clean Energy Financing

Click Logo or Link above

** PACE loans are limited to homeowners with good credit, minimum 20% Home Equity, maximum 10% LTV and loans are funded by local governments who will add the loan amount to your tax bill (as a mello roos) to paid of in a number of years.


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Links from YourEcoTeam.com are not endorsements or validation of any claims made by their hosts regarding "green" products or services. Each link is responsible for its own marketing. You are encouraged to report inconsistencies, 'greenwashing,' or false claims through our contact page.



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