Consider: Energy-Efficient Financing, Home Equity Lines of Credit, Home Equity Loans, Home Loans, and Low Rate Construction Loans.
Home Energy Rating
Most energy-efficient financing programs will encourage you to have an energy rating for your new or existing home, which will tell you and the lender how energy-efficient it is. A rating typically involves an inspection by a professional energy rater who is certified under a nationally or state accredited home energy rating system (HERS). There are several options regarding HERS, so the type of HERS used will depend on where you live. Some states even have more than one HERS.
For the most part, an energy rater will inspect the energy-related features of a home, such as insulation levels, window efficiency, heating and cooling systems, and air leakage. After the inspection, the energy rater will probably give you a report that includes the home's energy rating along with an estimation of annual energy use and costs. The report also may include recommended energy-efficient improvements, if needed, and their costs, as well as the potential annual savings and eventual payback of the improvements.
To help qualify for most energy-efficient financing, the report usually must show that the home is energy-efficient or that recommended improvements are cost-effective and will save you more money than you'd be borrowing to install them. While calculating whether a borrower qualifies for a mortgage, a lender can recognize these savings and add the cost of the improvements into the mortgage. Or, if the home is already energy-efficient, the lender can stretch the debt-to-income qualifying ratio, which is expressed as a percentage (the ratio is calculated by dividing a borrower's monthly payment obligation on long-term debts by the borrower's net effective income or gross monthly income).
The cost of a home energy rating and how it can be paid—by the borrower, the seller, the lender, the real estate agent, or financed as part of the mortgage—as well as the availability of certified energy raters, can vary from state to state and from one energy-efficient financing program to another.
Energy-Efficient Financing Programs
You can apply for energy-efficient financing through a government-insured or conventional loan program. Some states even have programs for their residents, so it's a good idea to contact your state energy office to find out if your state does.
There are two types of energy-efficient mortgages (EEMs): one for a new home and one for an existing home. With an EEM, you can purchase or refinance a home that is already energy-efficient. Or you can purchase or refinance a home that will become energy-efficient after energy saving improvements are made. Most energy-efficient financing programs offer both types of EEMs, as well as home improvement loans for making energy efficiency upgrades to your existing home.
The right home improvement products, techniques, and services:
Contractors, home improvement stores, and specialty shops in your area may not yet have a complete familiarity with the ‘green’ opportunities, products, system integration, and overall savings potential. So, you may get some resistance, since people in general are typically more comfortable recommending something that they are already familiar with rather than something new. To help break the inertia, use the information across this website like our Return on Investment Master ROI Table. Also feel free to post a question in our forum on the message board about a particular need for your home relative to your area. Our team has spent multiple years aggregating research from public and private sector performance reports and from manufacturers and homeowners across the country in order to provide you with the perspective you may need to see the initial payback and long term advantages. Environmental enthusiasts and leading institutions like the American Institute of Architects and the National Association of Realtors, see the value and link into our resources to support their members.
The Green Home:
For your overall home improvement, you can save money, improve your family’s health, and save the planet. Find out for free how much it will cost to do different types of home improvement in your home from a qualified and member approved contractor in your area. Get a FREE Quote . Plus, regardless of the size and scope of your home improvement project, save money and keep your home clean with the top rated chemical free and concentrated Green Home Cleaning Products.
Home Improvement Basics:
When it comes to home improvement basics, look for interior home improvements like creating a clean, safe, and healthy home through sustainable ‘green’ furniture, home décor, zero VOC and Interior Paint, plus ENERGY STAR Appliances and Electronics. For energy and utility savings you can focus on insulation and air sealing, windows, doors, lighting and skylights, water saving plumbing opportunities, and high efficiency heating and air conditioning systems. On the outside of your house, look for exterior home improvement opportunities through landscape design and gardening plus solar energy, wind and other power sources. If you are undertaking a major home renovation, an additions, or building a new home, then take the lead to ‘go green’ in as many ways as possible to save money and the environment.