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What is an Energy Efficient Mortgage?

by Madeleine Tingen

An Energy Efficient Mortgage (EEM) is a mortgage that credits a home’s energy efficiency in the mortgage itself. EEMs give borrowers the opportunity to finance cost-effective, energy-saving measures as part of a single mortgage and stretch debt-to-income qualifying ratios on loans thereby allowing borrowers to qualify for a larger loan amount and a better, more energy-efficient home.

To get an EEM a borrower typically has to have a home energy rater conduct a home energy rating before financing is approved. This rating verifies for the lender that the home is energy-efficient.

EEMs are typically used to purchase a new home that is already energy efficient such as an ENERGY STAR qualified home. The term EEM is commonly used to refer to all types of energy mortgages including Energy Improvement Mortgages (EIMs), which are used to purchase existing homes that will have energy efficiency improvements made to them. EIMs allow borrowers to include the cost of energy-efficiency improvements to an existing home in the mortgage without increasing the down payment. EIMs allow the borrower to use the money saved in utility bills to finance energy improvements. Both EEMs and EIMs typically require a home energy rating to provide the lender with the estimated monthly energy savings and the value of the energy efficiency measures — known as the Energy Savings Value.

EEMs (and EIMs) are sponsored by federally insured mortgage programs (FHA and VA) and the conventional secondary mortgage market (Fannie Mae and Freddie Mac). Lenders can offer conventional EEMs, FHA EEMs, or VA EEMs.

For more information regarding EEMs and energy-efficient homes available in the Greenville, NC and Pitt County area, contact The Pistol Tingen Team at (252) 321-6161.

 

As part of its ongoing commitment to continuously improve housing relief efforts, the Obama administration announced  March 25  new adjustments to the Home Affordable Modification Program (HAMP) and to the Federal Housing Administration (FHA) programs.  These program adjustments will better assist responsible homeowners who have been affected by the economic crisis through no fault of their own.

The program modications will expand flexibility for mortgage services and originators to assist more unemployed homeowners and to help more people who owe more on their mortgage than their home is worth because their local markets experienced large declines in home values.

These changes will help the Administration meet its goals of stabilizing housing markets by offering a second chance to up to 3 to 4 million struggling homeowners through the end of 2012.  Costs will be shared between the private sector and the Federal Government; the Federal cost of these changes will be funded through the $50 billion allocation for housing programs under the Troubled Asset Relief Program (TARP).

For more information regarding these new homeowner options, please contact The Pistol Tingen Team—the real estate specialists for Greenville, NC and the Pitt County area.

Freddie Mac Will Soon Cease Purchases of Interest Only Mortgages

by Madeleine Tingen

Freddie Mac announced Thursday, February 25 that on or about September 1, 2010, the company will cease purchasing and securitizing "interest only" mortgages--including Freddie Mac Initial Interest fixed-rate and adjustable-rate mortgages.

Interest only mortgages, including Freddie Mac initial interest mortgages, provide for interest-only payments for a specified period of time beginning with the first monthly payment after the note date, and principal and interest payments on a fully amortizing basis for the remainder of the mortgage term.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets.  Freddie Mac supports communities across the nation by providing mortgage capital to lenders. over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

Displaying blog entries 1-3 of 3

BERKSHIRE HATHAWAY HomeServices Prime Properties,   Greenville, NC, 2625 Charles Blvd.

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