Photo by heymarchetti

Last September, I bought a house and got new dual pane windows, attic insulation, and weatherization, and all those improvements didn’t cost me a dime. In fact, I save money every month because I did this.

How did I do it? Three words: Energy Efficient Mortgage.

Energy Efficient Mortgage, or EEM, is a program sponsored by the Department of Housing and Urban Development (HUD) designed to give buyers/borrowers an opportunity to increase their loan amount in order to finance energy efficiency improvements on a future home.

So if the loan amount increases, how do you save money? That’s the cool part. To begin an EEM, a Home Energy Rater comes out and figures out the energy improvements that would increase efficiency and lower utility bills the most, then makes recommendations on which improvements to make. The idea is that the money that the buyer will save each month on utility bills because of energy improvements made will be more than the added cost of the monthly loan increase.

To sum it up for you math majors:
money saved > money spent
Therefore:
your pocket = extra money

For those of you in real estate careers working with buyers, this is what’s known in the business as a pretty sweet deal. And here’s where it gets even sweeter. Out here in Fair Oaks, CA, and all over the Sacramento area, the Sacramento Association of Realtors (SAR) is sponsoring a program called the ECO Grant which gives buyers using an EEM a $2000 grant of free money. There are only five stipulations:

• Buyer must finance at least $4000 of the EEM
• Home must have been built prior to 1979
• Home must be owner occupied after close of escrow
• Agent must be a Realtor with SAR
• Lender must be an affiliate of SAR

That $2000 can be used on closing costs, energy upgrades, or to pay down part of the EEM. You can read more about the ECO Program at SAR’s website.

Sacramento is one of the leading regions for using the EEM, and one of the foremost experts on EEM is based right here in our area. Tom Carruthers and his wife Lee run Federal Energy Services, and they have been helping homebuyers with their Energy Efficient Mortgages since 1982. They helped me with mine last year, and I have nothing but good things to say about them.

The moral of the story here is that it is a fantastic time to buy right now, especially for those who would normally have to rent, and most especially in Fair Oaks, CA and the Sacramento area. Get signed up for the classes to become a real estate agent today and our office can help you get great deals for some of the multitudes of buyers out there.