An Energy Efficient Mortgage lets a borrower roll the cost of qualifying energy-efficient upgrades into an FHA- or VA-insured loan, up to a program-specific cap.
How it works
FHA caps the financeable amount at 5% of home value or $8,000, whichever is lower. VA caps it at a flat $6,000. Comparing the planned improvement cost against the applicable cap shows how much can be financed versus paid separately.
What this does not include
This does not include Fannie Mae’s HomeStyle Energy or Freddie Mac’s GreenCHOICE programs, which use different caps and eligibility rules than the FHA and VA EEM programs modeled here.
How to use this calculator
- Enter home value, loan type, and planned improvement cost.
Frequently asked questions
Do I need a separate energy audit to use an EEM?
Typically yes — most EEM programs require a home energy assessment to identify and cost out qualifying improvements before the financeable amount is finalized.
Can EEM funds be used for any home improvement?
No — only improvements identified as cost-effective energy upgrades by the required energy assessment typically qualify, not general renovations.
Does an EEM require re-qualifying for the extra financed amount?
No — that’s the core benefit: the financeable EEM amount is added to the loan without a separate debt-to-income qualification for that portion.
