Under the FHA EEM Program, a borrower can
finance into the mortgage 100 percent of the cost of eligible energy efficient
improvements, subject to certain dollar limitations, without an appraisal of the
energy improvements and without further credit qualification of the borrower.
To be eligible for inclusion into the mortgage, the energy efficient improvements
must be “cost effective,” i.e., the total cost of the improvements
(including maintenance costs) must be less than the total present value of the
energy saved over the useful life of theimprovements. The cost of any improvement
to the property that will increase the property’s energy efficiency and that is
determined to be “cost effective” is eligible for financing into the mortgage and
its cost may be added to the mortgage amount up to the greater of:5 percent of the
property’s value (not to exceed $8000) or, 2)$4000.