Though there are plenty of home energy tax credits for the taking, many homeowners find the upfront costs prohibitive when it comes to making green home renovations. Have you considered taking out a green loan? These loans are based on the premise that a more energy-efficient home with lower utility bills will enable you to afford a slightly larger mortgage payment. Green loans are available through the federal government, state governments as well as private lenders.
The Federal Housing Administration (FHA) offers help with financing a green home renovation, either when purchasing a new home, refinancing or preparing to sell. The Energy Efficient Mortgage (EEM) program offers loans that are insured (but not provided by) the FHA, to cover the cost of these improvements. The amount is determined through a home energy audit or based on the home energy rating system (HERS).More »
Renovations that lead to at least a 20% reduction in energy use may qualify homeowners for an Energy Star mortgage. Borrowers may even be eligible for reduced fees and assistance with closing costs, so it's not necessarily more expensive than a typical mortgage.More »
Many states administer programs that offer financing for energy-efficiency renovations. Click the link above to access a map to find out what's offered in your state.More »
If you already own a home and have a mortgage, check with your lender to see if they offer options for refinancing and obtaining a green loan to renovate your home. If you are purchasing a home, many lenders offer incentives if you plan to make improvements. Bank of America and Citigroup have offered $1,000 in credit towards closing costs when borrowers opted for a green loan.
1. FHA Energy Efficient Mortgage
The Federal Housing Administration (FHA) offers help with financing a green home renovation, either when purchasing a new home, refinancing or preparing to sell. The Energy Efficient Mortgage (EEM) program offers loans that are insured (but not provided by) the FHA, to cover the cost of these improvements. The amount is determined through a home energy audit or based on the home energy rating system (HERS).More »
2. Energy Star Mortgage
Renovations that lead to at least a 20% reduction in energy use may qualify homeowners for an Energy Star mortgage. Borrowers may even be eligible for reduced fees and assistance with closing costs, so it's not necessarily more expensive than a typical mortgage.More »
3. State Green Loan Programs
Many states administer programs that offer financing for energy-efficiency renovations. Click the link above to access a map to find out what's offered in your state.More »
4. Green Home Loans from Private Lenders
If you already own a home and have a mortgage, check with your lender to see if they offer options for refinancing and obtaining a green loan to renovate your home. If you are purchasing a home, many lenders offer incentives if you plan to make improvements. Bank of America and Citigroup have offered $1,000 in credit towards closing costs when borrowers opted for a green loan.