September 9, 2015
On September 14, 2015, the new FHA Single Family Home Loan policy handbook goes into effect. There are changes to existing policy, clarifications of existing policy, and other useful information for lenders and borrowers alike. We’re examining some frequently asked questions about FHA loan rules–the answers to which will be official FHA policy when the new handbook launches on the 14th.
One area that has a variety of questions concerns the FHA’s Energy Efficient Mortgage (EEM) program. Can a borrower finance energy efficient repairs without taking out an FHA EEM? What are the borrower’s options as described in HUD 4000.1?
According to the FHA/HUD official site:
“The borrower can finance the cost of eligible energy-related weatherization improvements in conjunction with:
–Section 203(b) purchase or no cash-out refinance
–Section 203(h) Mortgage Insurance for Disaster Victims
–Energy Efficient Mortgages (EEM)”
Furthermore, HUD 4000.1 says that weatherization upgrades or improvements can be made for:
–existing properties (one-to four-units)
–condominiums (one unit)
–manufactured Housing (single unit)”
Specific “weatherization items” allowed under these rules include, but may not be limited to:
–air sealing (including weather-stripping doors, caulking window and plumbing penetrations)
–insulation (attic, floors, walls, basement)
–duct sealing and insulation
–smart thermostats and equipment controls
–windows and doors
–low flow water fixtures
–carbon monoxide monitors and other combustion appliance safety measures
All of that information is found in the Frequently Asked Questions section of the HUD official site related to the new housing policy handbook. There is additional information about dollar limits on the above improvements–we’ll cover that and related issues in a future blog post.
Do you work in residential real estate? You should know about the free tool offered by FHA.com, designed especially for real estate websites–a widget that displays FHA loan limits for the counties serviced by those websites.
It’s simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today: http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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