Here is how it works. If you are going to purchase a home or property which requires improvements, tell your regular lender you want to apply for an energy-improvement mortgage that would be connected to, for instance, your FHA-insured loan.
Then, you’ll need to have the home “rated” by a trained professional, generally called an energy rater. You can be sure that once your rater is finished, you are going to be presented with a long list of improvement recommendations.
It is now your responsibility to contact contractors and get some bids for the work to be done. This last part will be done after you close escrow.
Now suppose your recommendations are going to cost you about $5000, these recommendations are submitted into your loan package for escrow. Now, once escrow closes, you will take those bids mentioned above and select the best one.
You will then submit your final improvement expenses to escrow who will pay your contractor directly for the completed work (your home will be inspected first to insure the worked is actually completed).
The best thing about an EIM is that you can stretch your income to loan ratios due to the fact that you re going to be saving money on energy charges.
It’s not a bad deal if you are into going green and it would seem that as long as President Obama is in office, EIM’s will be highly encouraged for award to borrowers.
Appraisal Source is a New York based residential real estate appraisal firm. Their highly-qualified appraisal staff provides independent residential real estate appraisals throughout Long Island and New York City.
Here’s the original article…Market ripe for green loans