What it is, and How it Works
The largest payment that you have out of all of your monthly obligations is going to be your mortgage payment. It’s important that you are able to manage it and that it’s doing for you what you need it to. FHA focuses on ways to make your home loans more beneficial and do your loan in a way that makes sense for both of you. This is why there is a lot of talk on FHA’s EEM Program.
EEM, stands for energy efficient mortgage, and allows the homeowner to save on the cost of utilities by purchasing new energy efficient heating and cooling systems. You can also make improvements that will help to winterize the home, or if you purchased an older home it may be a matter of putting in proper insulation. These improvements can certainly aid you in saving money over time by having lower utility bills every month.
Whether you are a new home buyer, or you are currently a home owner, FHA’s EEM Program may be right for you. This program is designed to help you finance the cost of these improvements. HUD and FHA work together to bring this program to you, so that you can finance the cost of energy efficient improvements into a single mortgage. FHA’s EEM program has recognized the need to lower monthly utility costs for new home owners and those that currently own a home. In a bad economy we all need to find ways to save every dime we have. One of the bonuses of this program in addition to what it does, is that you don’t have to be approved for any additional financing. The reasoning behind this is because the energy efficient improvements are going to cut your cost on utilities, so you won’t have to worry about that added expense.
FHA’s EEM Program is still based upon a traditional loan of a 30 or a 15 year fixed. When purchasing a home, FHA does want you to make a 3.5% cash investment into the sale price of the home. This is good, because they are encouraging home buyers to make more of an investment upfront in the home, versus having to borrow everything. This also keeps what you have to pay back down to a minimum. The total amount of the mortgage is based on the cost of the home, plus the money borrowed for the energy efficient improvements. In this case, FHA will allow your loan to go above the maximum loan amount, only for the amount that these improvements will cost you.
For more information on the FHA Energy Efficient Mortgage Program, you can do to www.fhaloansnow.net.
As a real estate executive and philanthropist, Mayer Dallal provides valuable counsel to individuals and families dealing with economic uncertainty. The advice Mayer Dallal gives his clients is to have options, to navigate this difficult economy with knowledge and confidence.
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