Mortgage Your Home, Not the Earth

by Melody Warnick, Natural Home & Garden Magazine - 09/05

Getting into a green home isn't cheap, but in the long run you'll save cash. For now, recoup some up-front expenses with a mortgage that rewards environmental consciousness. Here are three eco-friendly options:

FHA Retrofit Energy Efficient Mortgage (FHA EEM)

Your home: Leaks air like the Hindenburg.
What you get: A loan padded with extra cash to cover planned energy improvements. Low-E windows, anyone?
How to qualify: Hire a Home Energy Rating System (HERS) inspector to estimate the cost of making upgrades. You're eligible only for changes that pay for themselves.
Expected savings: Up to 30-50% savings a year on your energy bill.
Sign up: www.EnergyEfficientMortgages.com

Location Efficient Mortgage (LEM)

Your home: A short walk from just about everything.
What you get: More home-buying power with a relaxed debt-to-income ratio.
How to qualify: Buy a home in urban Chicago, Los Angeles, San Francisco or Seattle, the only cities where the pilot program is now available. Your mortgage break depends on accessibility to local businesses, schools and public transportation.
Expected savings: Up to a few hundred a month on transportation, which goes toward your bigger mortgage payment.
How to sign up: LocationEfficiency.com.

Fannie Mae New Construction Energy Efficient Mortgage (EEM)

Your home: Brand new and uber-efficient.
What you get: A debt-to-income ratio break because estimated energy savings qualify as income. You may also get to wrap in closing costs and private mortgage insurance.
How to qualify: Get an energy inspection to verify that your home's eco-friendly.
Expected savings: Up to 30-50% savings a year on your energy bill.
How to sign up: www.EnergyEfficientMortgages.com