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VA Loans

VA Mortgage Loans: What Is a VA EEM?

As your partner in the home-buying process, we want to make sure that you understand all of your options. One lesser-known home financing option that many military borrowers aren’t aware of is the Energy Efficient Mortgage Program or EEM loans. If you’re considering VA mortgage loans and like the idea of living in a sustainable, energy-efficient space, then an EEM loan could be perfect for you. Below, we’ve discussed the program in detail. 


What Is a VA EEM?

Put simply, a VA Energy Efficient Mortgage or EEM allows you to roll the cost of energy-efficient improvements into your mortgage. This means you can finance renewable energy sources and efficiency upgrades as part of your VA home loan. 


Benefits of VA Energy Efficient Mortgages

Energy-efficient upgrades like solar panels, HVAC upgrades, or energy-efficient windows can be expensive. It can be hard to find the funds to pay for these expenses upfront with cash. But with a VA Energy Efficient Mortgage, you don’t have to. You can simply roll the costs of qualifying upgrades into your VA loan. This can be beneficial for veteran borrowers for many reasons including:

  • Lower utility bills – Efficiency upgrades financed through a VA EEM can help lower a homeowner’s monthly utility costs. Upgrades like insulation, energy-efficient appliances and windows, and solar panels can reduce energy usage and bills over time.
  • Increased home value – Renewable energy sources and efficiency upgrades that are permanently affixed to a home can boost that property’s value. Features like solar panels and upgraded HVAC systems can make a home more attractive to potential buyers.
  • Greater borrowing power – A VA EEM provides veterans and military members with more financing than a standard VA loan would. By rolling the cost of upgrades and improvements into the mortgage, buyers can finance more than if they took out a basic VA loan.


VA EEM Requirements

When it comes to EEM VA mortgage loans, there are some key requirements that borrowers should be aware of. First, you’ll have to have a home energy assessment conducted by a qualified professional to identify opportunities for energy-efficient upgrades and determine your property’s eligibility. Next, only certain permanent improvements like insulation, solar panels, HVAC systems, appliances, windows, and lighting qualify. Total costs must fall under VA county loan limits, which include the cost upgrades rolled in. Finally, you as the borrower need to meet general VA underwriting guidelines regarding income, credit scores, eligibility, etc. 

Reaching out to an expert who’s well-versed in VA mortgage loans is the best way to learn more about EEM eligibility and requirements.


Learn More About VA Mortgage Loans

Have questions about VA EEM loans or other home financing options? We’re here to help! Call our office today to speak to an expert and get more information.