Preplanning
One of the most important decisions a homeowner makes occurs when deciding whether to upgrade an existing home or build a new energy efficient home. In making the decision, think about the general condition and energy efficiency features of the existing home. Is the current home site suitable for the family’s needs? Are you comfortable? Does the home offer sufficient space? Are land values declining or increasing? What does it cost to maintain your current home? Weigh your decision carefully. Adding insulation, reducing air infiltration, installing a high efficiency heating system and water heater can reduce you monthly operating costs, but is that enough? Maintenance cost like foundation repair, roof repair, window replacement, mold and mildew, septic system condition, wiring—all may be a factor in deciding to upgrade or build that new home.

When choosing to build a new high-efficiency home, whether it’s the first home or the third, the attributes mentioned above remain very important. Energy cost savings, comfort, safety and health should drive your decision-making in the design of the new home. Don’t forget affordability, durability, purchase price and total operating costs.
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Financing
The possibility of qualifying for an energy efficient mortgage is a real advantage. Home buyers purchasing an energy-efficient home with energy consumption that can be documented may qualify for a larger mortgage than they would receive on a conventional home. According to the National Association of Realtors®, lenders are now looking closely at the projected utility costs for a home in determining whether a prospective mortgagee can afford both the monthly mortgage payment and the utility payment. In addition, the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) have changed their appraisal forms to include energy efficiency. Finally, Freddie Mac has changed its purchasing guidelines to permit higher loan-to-income ratios for energy efficient properties.

The bottom line is more prospective homeowners can qualify for these Energy Efficient Mortgages on an energy efficient home when lenders examine their ability to repay the mortgage.
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