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Green Mortgages Now Available

March 24th, 2008 8:52 PM

Green Mortgages Now Available

Effective March 12, 2008

Green Mortgages also know as Energy Mortgages are now availabe from Mortgage Lending Associates, Inc.

What is an energy mortgage? An energy mortgage is a mortgage that credits a home's energy efficiency in the home loan. There are two types of energy mortgages:

Energy Improvement Mortgage
- Finances the energy upgrades of an existing home in the mortgage loan using monthly energy savings
Energy Efficient Mortgage
- Uses the energy savings from a new energy efficient home to increase the home buying power of consumers and capitalizes the energy savings in the appraisal

The ability to leverage a home buyer's investment in energy efficiency increases the number of qualified home buyers and increases the purchasing power of the consumer. A recent analysis by the Environmental Protection Agency confirmed that energy efficient mortgages can have a dramatic impact on increasing the opportunities for home ownership. The analysis found that an average of 6.8% more families would be able to qualify for a mortgage through an energy efficient mortgage.

Fannie Mae, Freddie Mac, FHA and VA have adopted special underwriting guidelines to make financing energy efficiency less burdensome.

Other than the mortgage payment, the monthly utility bill often is a homeowner's largest monthlyexpense. Homeowners spend more on energy than on the combined costs of telecommunication needs -including local, long distance, cell phones, paging,cable, and Internet service.

By spending less on our energy bills, one will have more money available for mortgage payments and be able to build equity in a home faster.The home also has a major impact on the environment. In fact, many people are surprised to learn that the average home produces twice as much greenhouse gas emissions as the average car.2

An Energy Efficient Mortgage can help you finance cost-effective, energy-saving measures as part of your mortgage. These energy-saving measures will enable you to reduce your consumption of energy, lower your utility bills, help the environment, and increase the potential re-sale value of your home. And if you are upgrading an existing home, an Energy Efficient Mortgage can enable you to take advantage of the benefits it offers without having to move.

The Energy Efficient Mortgage guidelines make underwriting allowances for the borrower by permitting the savings from the cost of energy improvements, and/or residential energy efficiency tax credit to be added to the borrower's income.

Example of Fannie Mae Energy Efficient Mortgage

Standard Home		Energy Efficient Home
Purchase Price	$250,000	Purchase Price	$253,000
Monthly PITI	$1331	Monthly PITI	$1347
Down payment	$50,000	Down payment	$50,600
Energy Improvements	-0-	Energy Improvements	$2,400
Loan Amount	$200,000	Loan Amount	$202,400
Interest	7%	Interest	7%
Monthly Energy Savings	-0-	Monthly Energy Savings	$60
Average Energy Bill	$120	Average Energy Bill	$60
Total Expenses	$1451	Total Expenses	$1407

Monthly Housing Expense Savings - $44

Who qualifies for an Energy Efficient Mortgage? The good news is that all home buyers who qualify for a home mortgage also qualify for an Energy Efficient Mortgage!

For more information contact Jason Kaplan at (800) 651-2790.

Posted by Jason Kaplan on March 24th, 2008 8:52 PMPost a Comment (0)

My Mortgage Blog

Example of Fannie Mae Energy Efficient Mortgage

Standard Home

Energy Efficient Home