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Energy Efficient Mortgages

An Energy Efficient Mortgage (EEM) is a loan financing option that takes a home’s energy efficiency into account. EEMs are available both for purchasing new energy efficient homes, or for purchasing homes with planned efficiency improvements. EEMs are available through both government-insured and conventional loan programs.


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EEMs allow borrowers to include solar PV and thermal systems in the mortgage itself, and thus stretch debt-to-income ratios needed to qualify for a loan. Borrowers can obtain a larger loan amount for a more energy-efficient home.

A certified home energy rater must conduct an energy rating inspection before a bank approves financing. The rating will provide the lender with an Energy Savings Value – an estimate of the monthly energy savings.

Another option is an Energy Improvement Mortgage (EIM), which is used to purchase homes that will have energy efficient improvements made to them in the future. Borrowers can include the cost of the improvements (e.g. PV panel installation) in the mortgage without any increase in the down payment.

Learn more about EEMs at the U.S. Department of Housing and Urban Development or check out this EnergyStar factsheet.


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