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Fannie Mae’s Energy Efficient Mortgages Explained

Avatar for Dave Llorens
Published on 09/04/2007 in
Updated 03/12/2014

Fannie Mae, the massive government sponsored lender, now makes “Energy Efficient Mortgages” to help you get your own green friendly or solar powered home. 100% of people who have the financial basis to qualify for a conventional loan through Fannie Mae can also qualify for one of these “green loans.”

(Also, please note my server is having some troubles dishing up .pdf docs sometimes… If you experience trouble please let me know I’m interested to know how often this is breaking.)

So what does this mean? In short… Let’s say you’re planning on buying an existing home but wish to make it more energy efficient before you move in. What you would do is have Fannie Mae preform a HERS (Home Energy Rating System) on the house to measure the home’s energy efficiency. Then you can pick which energy efficiency measures like, say, a solar water heater, you’d like to install, and the “Energy Efficient Mortgage” will finance any of these projects up to 15% of the value of the home.

Example: So if you’re planning on getting a $200,000 mortgage to buy a $240,000 house, you can instead get a $236,000 Energy Efficient Mortgage and buy $36,000 worth of things like passive solar heating, wind power, wells… whatever.

The HERS inspection is awesome because you will be able to have a strong feel for exactly how much money those energy efficiency measures will be saving you monthly post-install. Not only might the improvements pay for themselves in a few years and add a great deal of value to your home (believe me, energy efficient will be a much stronger selling point 10 years after you make those improvements :-) ), but Fannie Mae will finance them and you’ll be doing something good for the environment.

Last modified: March 12, 2014

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