FHA Energy Efficient Mortgage
 | Are you taking into consideration refinancing your loan to a FHA Energy Effecient Loan Program? The idea behind such a program will comprise your new principal and interest expense as well as the extra expense of the energy improvements. Yet this new mortgage payment must me lower than the current principal and interest payment on your existing mortgage including reduction streamline refinance. Now there are no cash-out streamline refinance options available without an appraisal. The original principal balance substitutes for an appraised value. When it comes to a HUD REO you can do this without an appraisal and the sales price is used. Illinois Mortgage Brokers PROGRAM GUIDELINES: Here are some of the program guidelines such as having to have 5% of the purchase price or in the event you are refinancing 5% of the appraisal cost. Now there are 100% financing of what is deemed "cost effective" eligible energy upgrades. In the event to this you also have to have no supplementary liens on the house. The totality of the energy improvements is to be layered into the base loan total. However loan limits may exceed the total cost of the energy improvements in certain situations. UNDERWRITING & QUALIFYING BORROWER: So how does this program work inconjuction with the normal FHA programs? This type of mortgage is at first underwritten as if the energy package does not exist. The borrower additionally does not require to "income-qualify" or make available additional down payment for the energy improvement financing. For the appraisal there is no need to get a second one. The installment of the energy package also does not need to be completed prior to insuring. Up front Mortgage Insurance is based on the loan amount plus the Energy Effecient Mortgage. COST-EFFECTIVE: When it comes to Cost Effective it means the energy savings must be greater than the increase of the payment. Now cost effective has to be calculated and dependent on a state or nationally approved Certififed HERS Energy Rating. HERS ENERGY AUDIT (RATING): I want to rapidly point out here that HUD requires Certified Energy Rating is usuall a Buyer Cost. Payment prearrangments "must be made" with the rater before HERS rating is even ordered. So the first thing is that you can pay at the time of Rating the second is is that it can be paid in escrow as a closing cost or finally can be made part of the EEM total. WEATHERIZATION ITEMS: FINANCING ADDITIONAL ENERGY IMPROVEMENTS: When the maximum acceptable under the Energy Efficient Mortgage does not cover the cost of the entire energy package, additional funds may be obtained by utilizing the Weatherization Program For existing properties, energy-related weatherization items may be united with the Energy Efficient Mortgage HUD Handbook 4155.1, Rev 5,1-7(C)(2) INSTALLED AFTER THE CLOSE OF ESCROW: The enery efficient mortgage program funds are held in an Escrow Holding Account until all energy improvements have been totally installed. The home is re-inspected by the Rater or Appraiser, a Notice of Completion is issued and the Contractors are compensated from the Escrow Holding Account. POTENTIAL ENERGY IMPROVEMENTS: Following is a list of improvements that may be added to an Energy Efficient Mortgage, providing the calculations discover them "cost effective". Actual enhancements cannot be recognized until an energy audit (rating) has been done on the home by a certified HERS (Home Energy Rating System) provider. Only then established on the existing condition of the home can the actual improvements be identified. The following is not a absolute list, but one that will give you with a improved understanding of the potential possibilities the FHA Energy Efficient Mortgage has to improve the comfort, worth and trim down the operating expense of a residence. • Central Heating/Cooling (addition or replacement) • Dual Pane Low E Windows & Sliding Glass Door • Replace Wall Heating Unit(s) • Exterior Doors • Test & Seal or Replace Ductwork for Leaks • Attic & Wall Insulation • House Leakage Diagnostic Test & Seal • Water Heater Replacement Indiana Mortgage Brokers So if you are at all interested in an FHA Energy Efficient Mortgage, please feel free to contact us now as being approved for a mortgage is the most excellent way to secure your financing whether you are buying or refinancing. |
