My Perfect Mortgage
A Comprehensive Guide to the VA Energy Efficient Mortgage
5 minute read
April 24, 2024

Dreaming of a more energy-efficient home, but worried about the cost? As a veteran, you might qualify for a VA Energy Efficient Mortgage (VA EEM) to help finance both your home purchase and energy-saving upgrades!

This comprehensive guide dives into everything you need to know about VA EEMs. We'll explore what they are, how they differ from traditional mortgages, who qualifies, and the easy steps to take advantage of this program. Plus, we'll uncover the benefits of making your home more energy-efficient, saving you money on utility bills for years.

The federal savings bank logo
NMLS #411500
Check Rates
  • Lend in all 50 states
  • Veteran lending specialist available to you, no matter where you are
  • In-house processing and underwriting
  • Express Loan Approval program, which allows you to be done with the whole process (minus the contract and appraisal), so you can focus on finding your home.
  • Rate Protect (Lock & Shop) lock in your rate before you even find a home!
Your rate and terms may vary based on credit, income, and other factors.

What is a VA Energy Efficient Mortgage?

A VA Energy Efficient Mortgage is a special mortgage program that allows veterans to make energy-efficient home improvements.

By bundling the cost of energy-efficient upgrades into the mortgage loan, veterans can finance these improvements without increasing their overall mortgage payment. This results in lower utility bills and a more energy-efficient home.

Who Qualifies for a VA Energy Efficient Mortgage?

To qualify for a VA EEM, individuals must meet the eligibility criteria set by the Department of Veterans Affairs.

Eligibility Criteria for Veterans

Veterans who have served a certain time in the military and meet specific eligibility requirements outlined by the VA can qualify for a VA EEM to make energy-efficient improvements to their homes.

Eligibility for Active Duty Members

Active duty service members can also benefit from a VA EEM by leveraging the program to finance energy-efficient upgrades to their homes, thereby decreasing their utility bills and carbon footprint.

Eligibility for National Guard and Reserves

National Guard and Reservists are eligible for VA EEMs, providing them with an opportunity to enhance the energy efficiency of their homes through affordable financing options offered by the VA.

Additionally, homeowners need to have a home energy assessment conducted to determine the energy improvements needed.

Conventional Mortgage vs. VA Energy Efficient Mortgage

The VA EEM offers specific features that differentiate it from a traditional mortgage.

These include energy-efficient upgrades in the loan amount and special terms and conditions related to energy improvements.

Interest Rates and Terms

VA EEMs typically come with competitive interest rates and favorable terms, making them an attractive option for veterans looking to enhance the energy efficiency of their homes.

Energy-Efficient Upgrades Covered

From solar panels to energy-efficient HVAC systems, a VA EEM covers a wide range of energy-efficient upgrades that homeowners can choose from to make their homes more eco-friendly and cost-effective in the long run.

  • Insulation: Adding insulation to your attic, walls, basement, and crawlspace can significantly reduce your heating and cooling costs.
  • Air Sealing: Sealing air leaks around windows, doors, ducts, and other openings prevents conditioned air from escaping, improving efficiency.
  • Heating and Cooling Systems: Upgrading to high-efficiency furnaces, air conditioners, and heat pumps can make a big difference in energy use.
  • Water Heating: Installing a solar water heater or a high-efficiency water heater can lower your water heating costs.
  • Windows and Doors: Replacing old, drafty windows and doors with energy-efficient models can significantly reduce energy loss.
  • Renewable Energy Systems: Installing solar panels or a geothermal heat pump system can significantly reduce your reliance on traditional energy sources.

What Are the Steps to Obtain a VA EEM?

  • Pre-Qualification Process: The pre-qualification process for a VA EEM involves assessing your financial situation, determining your eligibility, and understanding the energy improvements needed for your home.
  • Home Energy Assessment: A professional will conduct a home energy assessment to identify areas where energy-efficient upgrades can be made, helping homeowners make informed decisions about the improvements required.
  • Choosing an Approved Lender: Selecting an approved lender is crucial in the VA EEM process as it ensures that the mortgage provider is well-versed in the program's requirements and can guide homeowners through the financing of energy-efficient upgrades.

Benefits of Energy-Efficient Upgrades for Homeowners

  • Lower Utility Bills: By making energy-efficient upgrades to their homes, homeowners can significantly reduce their utility bills and save money in the long term, creating a more sustainable and cost-effective living environment.
  • Increased Property Value: Energy-efficient improvements not only lower utility costs but also increase the overall property value, making homes more attractive to potential buyers in the future.
  • Environmental Impact of Energy Efficiency: Enhancing the energy efficiency of homes through upgrades and improvements contributes to a reduced carbon footprint, helping protect the environment and promote sustainable living practices.

VA Energy Efficient Mortgage FAQ

Q: What is a VA Energy Efficient Mortgage (EEM)?

A: A VA Energy Efficient Mortgage (EEM) is a program that allows veterans to make energy-efficient improvements to their homes and finance those improvements into their VA home loan.

Q: How do VA Energy Efficient Mortgages work?

A: VA EEMs work by providing additional funds to borrowers to make energy-efficient upgrades to their homes, which can help reduce monthly utility costs.

Q: What are some examples of energy-efficient improvements that can be made using a VA EEM?

A: Examples of energy-efficient improvements include installing solar panels, upgrading insulation, replacing windows and doors with energy-efficient ones, and upgrading heating and cooling systems.

Q: Can I apply for a VA Energy Efficient Mortgage when purchasing a new home?

A: Yes, VA EEMs can be applied when purchasing a new home, as well as when refinancing an existing home with energy efficiency improvements in mind.

Q: How do I qualify for a VA Energy Efficient Mortgage?

A: To qualify for a VA EEM, you must be eligible for a VA home loan and meet the criteria set for energy-efficient improvements as outlined by the Department of Veterans Affairs.

Q: What is the process for applying for a VA Energy Efficient Mortgage?

A: The process involves working with a lender knowledgeable about VA EEMs, conducting a home energy audit, determining the cost of energy-efficient improvements, and submitting the necessary documentation to apply for the loan.

Q: Can I make energy-efficient home improvements after obtaining a VA EEM?

A: Yes, you can use the unused VA EEM funds to make additional energy-efficient improvements to your home, as long as they meet the program guidelines.

Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.