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ENERGY STAR for Lenders


Energy Efficient Mortgage for ENERGY STAR Manufactured Homes

ENERGY STAR® manufactured homes are eligible for the Federal Housing Authority's (FHA) Energy Efficient Mortgage (EEM) program. The Department of Housing and Urban Development has approved the Systems Building Research Alliance (SBRA) as a home energy rater for purposes of the EEM. This means that ENERGY STAR manufactured homes will have their energy savings calculated by SBRA and will not be subject to an on-site home energy rating in order for a homebuyer to qualify for an EEM.

The EEM program recognizes that the improved energy efficiency of a house can increase its affordability by reducing its operating costs. Cost-effective energy improvements result in lower utility bills, conserve energy and, thus, make more income available for the mortgage payment.

As outlined in FHA's Mortgagee Letter 2005-21, the EEM program allows a borrower to finance 100% of the expense of a cost-effective "energy package," the features and improvements that make the house more energy efficient, and any soft costs related to demonstrating the home meets ENERGY STAR requirements. A cost-effective energy package is one where the cost of the improvements, including maintenance, is less than the present value of the energy saved over the useful life of those improvements. The borrower does not need to qualify for the additional financing or provide additional down payment.

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Applying for the FHA EEM

The process for qualifying for the EEM is simple. Once it is determined that both the borrower and the property are eligible for an FHA mortgage and the buyer selects an ENERGY STAR home design, the home retailer completes the application forms (see below) and submits them to SBRA. SBRA determines the allowable increase in the mortgage amount, and will provide that information directly to the retailer and lender for completing the loan application.

To apply for FHA's EEM for manufactured homes, follow the steps below:

Step 1 Complete the Request to Provide FHA EEM Energy Report Agreement.

Step 2 Complete a Manufactured Home Energy Report for each home to be evaluated.

Step 3 Complete a Manufactured Home Specification Sheet for each home to be evaluated.

Step 4 Submit the completed agreement, the Energy Report(s) and the Home Specification Sheet(s) to:

Systems Building Research Alliance
1776 Broadway, Suite 1250
New York, NY 10019
Fax: (212) 496-5389
Attn: Gwynne Koch

SBRA will estimate the energy costs of the home built with and without the ENERGY STAR package, determine the present value of the energy savings that results from installation of the ENERGY STAR package, and determine the allowable increase in the mortgage amount.

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Features and Benefits of the FHA EEM

The EEM enables the buyer to put the value of the energy savings back into the home. Features of the FHA EEM include the following:

  • Any FHA-approved lender can approve the EEM.
  • The EEM is initially underwritten as if the ENERGY STAR package did not exist. When qualifying a homebuyer, the cost of the energy improvements is subtracted from the sales price of the home.
  • The homebuyer qualifies for a 2% increase in their qualifying income ratios, and these ratios are calculated on the cost of the home before the energy improvements.
  • Up to $8,000 can be added to the loan amount, based on a calculation that takes the expected energy savings into account. The borrower does not have to qualify for the additional financing or make a higher down payment.
  • The calculation for the private mortgage insurance premium is based on the cost of the home before the energy improvements.
  • The home is not subject to an on-site home energy rating in order for a homebuyer to qualify for an EEM.

For more information, contact Gwynne Koch at or 212-496-0900 x120.

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Essential Documents and Forms

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Additional information

• Back to the ENERGY STAR for Manufactured Homes main page

• ENERGY STAR for Home Manufacturers

ENERGY STAR for Modular Builders

• ENERGY STAR for Retailers and Installers

• ENERGY STAR for HUD-code Plant Certifiers

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