Energy Efficient Mortgages (EEM)

Most of us in America, don't have the first clue about saving energy and lowering our utility costs. We just assume that whatever we're paying to operate our home is just the cost of owning a home. Nothing could be further from the truth.

Many of us have experienced firsthand that we are beginning to face an energy crisis like nothing we have seen in the past. In Michigan alone, we have seen the cost of natural gas jump over 50% in the last two years combined. It's counterparts, heating oil and propane, have also risen significantly in cost. The bad news is that we can continue to expect these costs to rise. The good news is that the Energy Efficient Mortgage shows you where you're wasting energy (and money) and what you can do about it.

What does it do for me?

The premise of this mortgage is simply that a more affordable home means that you can afford more home. The process for both existing and new homes begins with an energy audit being performed on the actual home or the blueprints of the home to be built. The audit accurately identifies how the home uses energy and where it can perform better.

People who utilize this program will end up spending 10% to 20% less on their total housing expense, than if they had simply bought the home outright with a regular mortgage and did nothing to address the home's efficiency. The Energy Efficient Mortgage does work with every type of conventional financing but different guidelines apply for each variation. Please refer to the menu on the left to learn more and see actual examples of the Energy Efficient Mortgage at work.

How does it work?

After you've been pre-qualified for the mortgage, the next step is to perform the HERS (Home Energy Rating System) audit on the home. This extremely accurate energy rating was jointly developed by the U.S. Department of Energy (DOE) and the U.S. Department of Housing and Urban Development (HUD). The report you get back lists the all the improvements that can be done to the home, their installation cost, what they will save you in operating costs, and the respective payback of improvements. You use the auditor's report like a menu to choose what you would like to do to your home.

Once you've settled on what improvements you'd like to make, money for the improvements are placed in escrow and your closing is scheduled. All of the work to be done is completed by licensed contractors within the first 90 days after you close. A followup inspection is done, to make sure that the work was done properly. Once the work has been signed off on, the funds are released to pay the contractors accordingly.

How long do they take, as compared to regular mortgages?

From start to finish, doing an Energy Efficient Mortgage should take no longer than it takes to do conventional financing. In fact, we have closed these mortgages in as little as 8 to 13 days. (And that includes weekends.) It also helps that we really know what we're doing.

It's good for the environment too?

Of course it is! When you talk about air quality and our effect on it, most of us don't realize what kind of power plant emissions we're causing. The average home that goes through an Energy Efficient Mortgage will reduce greenhouse gas emissions by 2 to 4 TONS per year. That's good for every one of us, because it means we are breathing much easier every day of our lives.