What is the purpose of this program?
Provides mortgage insurance for a person to purchase or refinance a principal
residence and incorporate the cost of energy efficient improvements into the
mortgage. The mortgage loan is funded by a lending institution, such as a
mortgage company, bank, savings and loan association and the mortgage is insured
by HUD.
What are the eligibility requirements?
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Borrowers are eligible for approximately
97% financing. Borrowers are able to finance closing costs and the up front
mortgage insurance premium into the mortgage. Borrowers are also responsible
for paying an annual premium.
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Eligible properties are one to two
existing units and new construction.
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The cost of the energy efficient
improvements that may be eligible for financing into the mortgage is the
greater of 5% percent of the property's value (not to exceed $8,000) or
$4,000.
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To be eligible for inclusion in the
mortgage, the energy efficient improvements must be cost effective, meaning
that the total cost of the improvements is less than the total present value
of the energy saved over the useful life of the energy improvement.
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The cost of the energy improvements and
estimate of the energy savings must be determined by a home energy rating
system (HERS) or energy consultant. Up to $200 of the cost of the energy
inspection report may be included in the mortgage.
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