FHA Energy Efficient Mortgage in Florida: Financing Upgrades That Cut the Power Bill
An FHA energy efficient mortgage Florida buyers add to a purchase or refinance finances cost-effective energy improvements above the loan limit, without requalifying. A home energy assessment sets what qualifies.
Educational content only. This article is for informational purposes and does not constitute financial, legal, or lending advice. Loan programs, rates, and eligibility requirements change frequently. Consult a licensed mortgage professional before making any borrowing decision. Mortgage Capital | NMLS# 1859012 | Licensed in Florida.
An FHA energy efficient mortgage Florida buyers attach to a purchase or refinance finances cost-effective energy improvements on top of the base loan, without requalifying for the added amount.
A home energy assessment decides what qualifies. Our FHA loan page covers the base loan it rides on.
What it is
An add-on to any FHA purchase, 203k or refinance that finances energy improvements.
The HUD EEM page sets the rules.
The added amount can exceed the county loan limit.
No additional income qualification for the improvement cost.
The improvements must pay for themselves in energy savings.
The cost-effectiveness test
A home energy assessment estimates the savings from each improvement.
Improvements qualify if the savings over their useful life exceed their cost.
The assessor's report lists them.
Solar, insulation, windows, air conditioning and water heaters are common.
The report is part of the loan file.
How much can be added
The lesser of the cost-effective improvements or a cap based on the home's value.
Five percent of value, capped by a dollar figure, with a floor.
Modest, but enough for a system upgrade or a solar array in many cases.
See our guide to FHA loan limits in Florida.
The cap can exceed the county limit.
Florida improvements that qualify
High-efficiency air conditioning, the largest Florida electric load.
Attic insulation and radiant barriers.
See our guide to solar panels and your mortgage in Florida.
Impact windows with low-emissivity glass count for energy; they also earn wind credits.
See our guide to hurricane shutters versus impact windows in Florida.
The assessment
A certified home energy rater performs it.
A few hundred dollars, financeable in the loan.
Rates the home and projects savings per improvement.
Order it during the inspection period on a purchase.
The lender needs it before closing.
On a purchase
The base FHA loan closes with the EEM amount added.
Improvements are completed after closing from escrow, like a 203k.
See our guide to the FHA 203k in Florida.
Ninety days to complete in most cases.
An inspection confirms.
On a refinance
Add the EEM to a rate-and-term or streamline refinance.
See our guide to the FHA streamline refinance in Florida.
A streamline with an EEM allows the loan amount to rise for the improvements.
The payment test on the streamline accounts for the energy savings.
A rare way to add to a streamline.
With a 203k
The EEM rides on a 203k renovation loan for a whole-house project.
See our guide to FHA limited 203k in Florida.
Energy items above the 203k budget go in the EEM.
One closing, one escrow.
Common on older Florida homes.
VA and conventional versions
VA offers an energy efficient mortgage add-on with its own cap.
See our guide to VA renovation loans in Florida.
Conventional renovation loans can include energy items without a separate programme.
See our guide to HomeStyle renovation loans in Florida.
The FHA EEM is the most structured.
Insurance credits alongside
Impact windows and a sealed roof deck earn wind mitigation credits.
See our guide to wind mitigation inspections in Florida.
Energy savings plus premium savings on the same improvement.
Order the wind mitigation after the work.
Two paybacks.
PACE comparison
PACE finances the same improvements as a tax-bill lien ahead of the mortgage.
See our guide to whole house generator financing in Florida.
The EEM sits inside the mortgage with no priority problem.
Contractors push PACE; the EEM is the better structure.
Decline PACE.
Contractors and permits
Licensed contractors with permits for electrical and mechanical work.
The Florida DBPR licence lookup verifies.
Product efficiency ratings documented for the assessor.
Draws from escrow on completion.
Keep everything for resale.
Mortgage insurance and the added amount
FHA premiums apply to the whole loan including the EEM.
See our guide to PMI versus MIP in Florida.
A small increase in the monthly premium.
Offset by the energy saving on a cost-effective project.
That is the test's purpose.
Sales tax holidays
Florida's periodic holidays on efficiency and hardening items reduce the project cost.
Timing the purchase to the holiday helps.
The assessor's cost figures should reflect the tax-free price.
Check the current year's schedule.
A small saving on a large item.
Lender availability
Not every FHA lender processes EEMs.
See our guide to mortgage brokers versus banks in Florida.
Ask at application.
A broker knows who does.
The paperwork is modest once the assessment is in.
A worked example
A 1980s block home bought with FHA financing.
The energy assessment supports a new air conditioning system and attic insulation.
The EEM adds the cost to the loan without requalifying.
Summer electric bills drop by more than the added payment.
The wind mitigation on the sealed attic earns a premium credit too.
Reading the assessment report
Each improvement lists cost, annual savings and useful life.
Cost-effective items show savings exceeding cost over the life.
Items that fail the test can still be done from cash.
The lender finances only the passing items.
Keep the report for resale.
Where to start
Order a home energy assessment during the inspection period.
Ask the lender whether they process FHA EEMs.
Then start a conversation and we will add the qualifying improvements to the loan.