As builders and remodelers run into resistance related to higher costs associated with energy efficiency improvements, there is a little used tool available to help assuage home owners and buyers reluctant to invest in energy saving features.

Known as a “green mortgage” or Energy Efficient Mortgages, HUD is getting the word out about their availability. These mortgages can be used to buy a new home, upgrade an existing one or to refinance an FHA loan. Borrowers can finance up to 97 percent of the cost of improvements that include insulation, high-efficiency appliances and furnaces, replacement windows, and solar hot water heaters, just to name a few. So when buying a home buyers don’t have to get a separate mortgage for these kinds of improvements, the interest becomes tax deductible, and they also end up with the energy expense savings. And that can come out to a significant amount of money.

HUD says that since 1980 the amount of energy used by the average American home has doubled. On top of that, the cost of energy has risen dramatically. Estimates are that energy efficiency improvements can cut home energy costs by 10 to 50 percent. So far, about 30,000 of these mortgages are issued every year.

There is more information at HUD.

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