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Sarasota Home Buyers Can Save Money with Energy-Efficient Mortgages

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Green Home LoansBuyers of both new properties and fixer-uppers are increasingly looking to incorporate "green" elements within their homes.



This makes sense for many reasons, environmental impact being only one. By seeking out a mortgage, either first or second, that encourages green building practices, Sarasota buyers can integrate sound energy saving measures while taking advantage of special green mortgage rates.

The two loan types that are most appropriate in our market are Energy Efficient Mortgage (EEM) and Energy Improvement Mortgage (EIM).

EEMs provide the borrower with special benefits when purchasing a home that is energy- efficient, or can be made efficient through the installation of energy-saving improvements. EIM refers to a loan that's used to buy and fix up a house that needs green improvements, such as making it more energy efficient. Both are technically energy efficient mortgages, or EEMs.

Sarasota buyers benefit by the ability to qualify for a larger loan on a better home by stretching their debt-to-income qualifying ratio on loans for energy-efficient homes (usually a 33% maximum as opposed to a standard 29% maximum). Besides saving money on future energy expenses, they also benefit from a more comfortable home and can potentially increase the resale value when it's time to sell.

By incorporating an investment of green elements into a home at the time of purchase, the monthly payment amount may be slightly higher, but this up-front cost is easily absorbed over a short period of time with savings in energy costs. Some improvements that might qualify for an EEM include ENERGY STAR appliances, insulation, set-back thermostats, upgraded windows, heat pumps and solar installations.

William True, recipient of the National Association of REALTORS' GREEN certification and broker of True Real Estate in Sarasota, Florida, points out that the GREEN movement is becoming mainstream for many reasons. "While still in their infancy, EEMs and EIMs are beginning to gain popularity among environmentally-conscious home buyers. Consumers realize higher initial costs are quickly recouped and long-term benefits are realized through greater energy efficiency. Not surprisingly, many green buyers not only feel good about their decision, but sense a sort of social esteem in doing their part to help the environment."

Green CertifiedThe loan program is available through Fannie Mae, FHA, Veterans Affairs and the Department of Agriculture. They allow the buyer to finance the home, plus the energy-conserving improvements, without having to qualify for the additional cost of the improvements. LEED-certified homes also qualify for this program.

All buyers who qualify for a home loan automatically qualify for the EEM. Availability is unlimited by location, home price or utility company. A Realtor®, especially if he or she has completed green certification courses, and a lender who understands this particular loan program will help the buyer work through the process and roll the cost of building or renovating using green practices into the loan.

Sarasota buyers, particularly those who work with an exclusive buyer agent, can take advantage of this special loan program, upgrade their purchase with energy-saving green elements, and, at the same time, buy more house for less money. With real estate prices unbelievably low and mortgage rates essentially bottomed out, this is the time to act.

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