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Buyers Get More With Green Homes
By Mark Vanderlinden
homes
Fannie Mae
Fannie Mae (FNM/NYSE), the nation's largest source of financing for home mortgages, in partnership with the Home Builders Association of Central New Mexico (HBA) and participating lenders, has recently introduced a new energy efficient mortgage (EEM) that factors energy savings into the qualification process, allowing home buyers to qualify for larger loans.
Homes built under the HBA of Central New Mexico's Green Builder program help buyers qualify for a larger mortgage, by saving consumers money in the form of reduced utility bills. Those savings can be translated into a larger mortgage for the buyer or, in some cases, may even make a lower monthly payment possible. For underwriting purposes the appraised values may be adjusted using the energy savings.
While EEM's have been around for several years, the latest version, available through Fannie Mae's lender network, goes farther in utilizing the savings in both stretching the loan amount and possibly reducing payments for private mortgage insurance (PMI).
For example, if the energy savings, as calculated by a rating agency, are measured at $75 per month, the lender can allow the buyer to borrow an amount that would raise his or her monthly payment by the $75.
In today's market, that would mean that the same family could qualify for a loan that is approximately $10,000 larger. One of the many benefits is that the utility savings are real and the family would not have any additional expense. They have simply converted utility savings into mortgage payments, which are tax deductible.
For more information on Fannie Mae's affordable mortgage products or for a list of local lenders, consumers may call Fannie Mae's Consumer Resource Center at 1-800-7FANNIE or 1-800-732-6643, Monday through Friday, 7:00 am to 3:00 pm MDT.
