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Energize Ohio

Ohio State University Extension


Energy Efficient Mortgages

Incentive type: 
Energy Efficiency

Energy Efficiency and Renewable Energy Systems


An energy mortgage is a mortgage that credits a home\'s energy efficiency in the home loan. For an energy efficient home, for example, it could mean giving the home buyer the ability to buy a higher quality home because of the lower monthly costs of heating and cooling the home. For homes in which the energy efficiency can be improved, this concept allows the money saved in monthly utility bills to finance energy improvements.

There are two types of energy mortgages:

  • Energy Improvement Mortgage - Finances the energy upgrades of an existing home in the mortgage loan using monthly energy savings.
  • Energy Efficient Mortgage - Uses the energy savings from a new energy efficient home to increase the home buying power of consumers and capitalizes the energy savings in the appraisal.

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.

Federally Insured Mortgage Programs:

For more information on federally insured mortgage programs, you can refer to Energy Star\'s webpage on energy efficient mortgages. 

Conventional Energy Efficient Mortgages:

Conventional EEMs can be offered by lenders who sell their loans to Fannie Mae and Freddie Mac. Conventional EEMs increase the purchasing power of buying an energy efficient home by allowing the lender to increase the borrower\'s income by a dollar amount equal to the estimated energy savings. 

For more information on conventional EEMs, please visit the Energy Star webpage on energy efficient mortgages. 

Additional information on energy efficient mortgages can be found on the Residential Energy Services Network webpage here.