VA Loan Programs: Energy Efficient Mortgage (EEM)

High Efficiency Heat Pump and Water Heater VA Energy Efficient Mortgage: Looking to go “green”? For VA borrowers and homeowners, this may be more helpful than reducing your household’s environmental footprint.  Making home improvements more energy efficient could mean lower energy bills, additional tax breaks, and the added satisfaction of living eco-friendly. You might be able to finance all of this on the Energy Efficient Mortgage (EEM) VA Loan Program. The EEM VA Loan Program allows borrowers their homes’ energy efficiency and to finance the cost of upgrades.  You may do this at the time of purchase or as a refinance if you already own your home.

Energy Efficient Improvements may Include:

  • Solar heating systems including solar systems for heating water for domestic use
  • Caulking and weather-stripping
  • Furnace efficiency modifications limited to replacement burners
  • Boilers or furnaces designed to reduce the firing rate or to achieve a reduction in the amount of fuel consumed as a result of increased combustion efficiency
  • Devices for modifying flue openings which will increase the efficiency of the heating system
  • Electrical or mechanical furnace ignition systems which replace standing gas pilot lights
  • Clock thermostats
  • New or additional ceiling
  • Attic, wall, and floor insulation
  • Water heater insulation
  • Windows and/or doors, heat pumps, and vapor barriers

Maximum Allowable Cost of Improvements

Here are the specific Parameters:

  • The mortgage loan amount may be increased up to $3000 based solely on documented costs for energy efficiency improvements,
  • Or…up to $6000 provided the increase in the monthly mortgage payment does not exceed the likely reduction in monthly utility cost.
  • More than $6000 is subject to a value determination by VA
  • Or up to the amount necessary to pay for materials if the veteran performs labor

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