Going Green On A Refinance Loan

The phrase “going green” refers to incorporating environmentally friendly practices into a lifestyle or business. Did you know you can go green when you refinance a home loan? It’s true that government backed home loans and refinance loans such as those offered by the VA loan program and the FHA single family home loan program offer an initiative borrowers can use to add funds to the loan for the express purpose of making a home more energy efficient.


These loans, offered by participating FHA and VA lenders, allow you to add approved energy efficient features to the home. The added money to the home loan or refinance loan is permitted on the upgrades or alterations as approved by your lender after you submit a list of items for consideration and approval.

Your lender will give you details on how to do that, but you should know that the energy efficient upgrades can include things like new storm doors, better windows, even solar heating upgrades to your water heater system. There are a lot of improvements that can and are approved as a result of these add-ons.

The added funds are approved strictly for the use of the upgrades and improvements and borrowers will have to take extra steps in cases where they applicant wants to install them--money can be paid to the borrower to get these jobs done, but there is an accounting procedure to insure the upgrades actually do occur.

The name of this type of loan when administered by a participating FHA or VA lender is the “Energy Efficient Mortgage”. In most cases the loan will be initially drawn up as though the energy efficient part of the package isn’t going to happen, and the energy efficient portion is added into the loan paperwork at a point designated by your lender.

Talk to your loan officer about going green on an refinance loan to see what your options are--you may be surprised at what you learn.

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