Fannie Mae Information
Do you have potential homebuyers facing high monthly
utility bills? Are they thinking of buying or building a home, but want to be
sure their ongoing operating costs are as low as possible? Are they concerned
about the impact of energy use on the environment and about conserving our
natural resources?
If you answer yes to any of these questions, then Fannie Mae's home
performance power products which maximize efficiency in the areas of energy,
water, and indoor air quality to create the most comfort and value in a home is
a mortgage for you to talk about and offer.
What mortgage products does Fannie Mae offer that can help a consumer buy
a more efficient home? Fannie Mae has several mortgage products designed to
provide incentives for homebuyers to purchase more efficient homes. Our new Home
Performance Power mortgages offer zero down payment and additional flexibility
in the qualifying process.
- Community Home Performance Power and the Flexible Home
Performance Power are zero down payment mortgages that add projected
energy and water savings to income for the purpose of qualifying for the
mortgage, thus giving a consumer greater buying power. Community is for
low-to moderate-income borrowers, while Flexible is available to borrowers
of all incomes. A required 3 percent contribution toward closing costs may
come from a borrower's own funds, rebates, gifts, a grant, or certain other
sources. A consumer can take advantage of these mortgages if the home they
purchase meets the requirements of the Built Green Colorado program or the
energy efficiency of the property exceeds the Model Energy Code by 30
percent and the water conservation is designed into the property.
- With the HomeStyle Energy Efficient Mortgage (EEM), Fannie Mae
recognizes that the lower operating costs of an energy-efficient home mean
more dollars available for the mortgage. The EEM provides multiple benefits
for a buyer of an energy-efficient home. They will enjoy reduced monthly
energy costs, own a more valuable home, and can qualify for a larger
mortgage. The home they are buying can be energy efficient "as-is"
or they can use the EEM to increase the home's energy efficiency. The
participating lender can qualify a borrower for a larger maximum allowable
mortgage amount by adding the calculated monthly energy savings directly to
the maximum mortgage amount for which they qualify. The borrower's lender
can also add the value of the energy savings to the home's appraised value,
which could qualify a borrower for a larger mortgage and/or different
mortgage terms.
- The Colorado Built Green Mortgage was developed to support the
Colorado Association of Home Builders and the Home Builders Association of
Metro Denver through their "Built Green Colorado" program. The
Built Green Colorado program encourages homebuilders to build more
environmentally sensible homes. The mortgage product recognizes the
importance of energy, water, and resource efficiency in new homes. This
product is for borrowers of all income levels. The mortgage can be combined
with existing Fannie Mae mortgage products and allows a borrower to qualify
for "more" house while reducing monthly utility expenses.
How does a consumer learn more about the higher performance on their home?
All of these environmental mortgage products require the lender to obtain an
energy rating on the home. What is an energy rating? An energy rating is a
survey of where energy is used (and wasted) in a home. Depending on the audit, a
consumer can find out:
- The efficiency of the heating and cooling systems, water, heater,
lighting, and appliances;
- The levels of insulation in the walls, ceilings, attic, floors, and crawl
space;
- Locations of holes or cracks around the walls, ceilings, windows, doors,
light and plumbing fixtures, switches, and electrical outlets;
- Locations of duct leaks and sources of air access by using specialized
tools such as infrared cameras, duct testers, and blower door equipment;
- Usage patterns based on a review of past utility bills (in combination
with local climate data);
- Maintenance standards for appliances and cooling/heating systems; and
- The most cost-effective measures for reducing energy bills.
A home energy rating provides impartial standardized information on the
expected energy performance for heating, cooling, and hot water use of a home. A
rating can be performed for any house, regardless of its age, location,
construction type, or fuel use. Here in Colorado, the organization that provides
this service is E-Star Colorado. The E-Star home energy raters usually have
experience in the building trades or energy conservation. Generally, they attend
classes and pass exams to be certified by E-Star.
To obtain more information about mortgage products and the lender partners
offering them, you may call the Colorado Partnership Office at 303.675.0006.
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