New Jersey BySolar
973.784.4191 Renewable Energy Systems for Businesses & Residences

Include Loan with Your Home Mortgage

Homeowners who want solar power and can't afford the out of pocket expense have the option to apply for an energy efficient mortgage (also referred to as an EEM).

An energy efficient mortgage is a loan that allows homeowners to incorporate the cost of energy efficient features, such as a solar energy system, as part of their home purchase or refinancing mortgage.

There are several types of energy efficient mortgages available:

Federal Housing Administration (FHA)

FHA has an energy efficient mortgage program that encourages lenders to make mortgage credit available to borrowers who would not otherwise qualify for conventional loans on affordable terms and to residents of disadvantaged neighborhoods. For more information on FHA's energy efficient mortgages and to see if you are eligible, please visit the U.S. Department of Housing and Urban Development's Energy Efficient Mortgage Program page.


Conventional energy efficient mortgages, not backed by a federal agency, feature private lenders selling loans to Fannie Mae and Freddie Mac. This allows homebuyers to borrow up to 15% of an existing home's appraised value for improvements documented by a Home Energy Rating (an analysis of a home's energy efficiency). The lender will then calculate the projected energy savings for your home with a solar electric system and add it to the total loan value, allowing you to borrow even more money to put towards your solar panel installation. This saves you from having to put down an enormous chunk of money and allows you to recover some of the cost through an increased mortgage interest deduction.

And don't forget - the combination of energy savings and sale of SRECs, will amount to more money than the additional mortgage fee, meaning you'll still come out ahead in your solar energy system investment!