Eco-friendly Mortgage

Houses Bought As-Is for ALL CASH! Fast Closings!

Three benefits derived from purchasing a home with 203k financing are: repaired air infiltration areas, reduced heating costs and increased energy efficiency. While it is true that almost any home purchased, refinanced or remodelled can improve energy conservation by utilizing the Energy Efficient Mortgage (EEM) separate and apart from the 203k rehabilitation loan program, it is also true that EEM does not accomplish the same thing that 203k does.

Under 203k guidelines, when rehabilitation is done to an existing structure and the thermal efficiency of the dwelling will be improved, the improvements must include: Weatherstripping of all doors and windows to reduce infiltration of air when existin weatherstripping is inadequate or non-existent; Caulking or ealing all openings in exterior walls where the cavity has been exposed as a result of the rehabilitation; insulating ceilings where necessary; Adequately ventilate attic and crawl space areas, and several additional improvements proposed as part of the rehabilitation pursuant to standards outlined in 24 CFR Part 39, Appendix A-1 through A-6.

The program also provides standards and procedures for the replacement of entire systems such as heating, ventilating, and air conditioning systems, including the AC system supply and return pipes and ducts which must be insulated whenever they run through unconditioned spaces. Heating systems, burners and air conditioning systems must be carefully sized to be no greater than 15 percent oversized, except to satisfy the manufacturers' next losest nominal size. In the cases where new heating/cooling systems are proposed, heatloss/heat gain calculations must be provided for the entire house to ensure proper sizing of the heating system. HUD recommends using the design criteria developed by the American Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE) or Manual J, developed by the National Environmental Systems Contractors Association.

In addition to the above, HUD approves a Solar Energy Increase in Dollar Limitation when necessary for the installation of solar energy equipment. It's an increase of up to 20 percent in the maximum insurable mortgage amount, if sych an increase is necessary to facilitate the installation. Projections are that the solar energy system will also contribute to the value of the dwelling, limited only by its replacement cost. In addition to the long term savings afforded by energy conservation, there are also short term savings derived from financing with the FHA 203k program. For example the required down payment is only 3.5% and the payments are based on a fixed-rate 30 year term (15 year term loans also available to borrowers who need them).

Homes can be measured for energy ratings at the Energy Efficient Rehab Advisor Website.

For additional 203k mortgage sources and relevant information, please visit the recently launched FHA-specific B.K.HECM Search Engine.