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TS@Waltham
Dud?


Joined: 02 Apr 2008
Posts: 5

The FHA EEM limit
PostPosted: Wed Apr 07, 2010 5:56 pm Reply with quoteBack to top

Is there a hard upper limit of $8000 for Energy Efficient Mortgages or EEM? I talked to FHA customer service and she said there was no 8000 limit. She emailed me the following. Can any one confirm there is no $8000 hard limit?
Thanks

FAQ : How do I calculate the mortgage for an EEM?

Solution Details : Qualify the borrower using standard underwriting requirements and qualifying ratios.
New construction:
For homes built to the 2000 IECC (or retrofitted to meet IECC), ratios of 33 and 45 percent are permitted.
Subtract the cost of the energy package from the sale price (since builder has already included these improvements in the price) and qualify the borrower on the lower amount.
Once borrower and property have been qualified, use the energy rating report and calculate the dollar amount of the cost effective energy package.
The calculation is the lesser of 5% of:
? the appraised value ;or
? 115% of the median area price of a single family dwelling; or
? 150% of the Freddie Mac conforming loan limit (currently $417,000)
Add this amount to the base loan amount, and then calculate UFMIP.
The FHA maximum statutory loan amount for the area may be exceeded by the cost of the energy efficient improvements (and UFMIP).
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MakingIt
Nitroglycerin


Joined: 04 Dec 2007
Posts: 629

Re: The FHA EEM limit
PostPosted: Sat Jun 12, 2010 6:08 am Reply with quoteBack to top

TS@Waltham wrote:
Is there a hard upper limit of $8000 for Energy Efficient Mortgages or EEM? I talked to FHA customer service and she said there was no 8000 limit. She emailed me the following. Can any one confirm there is no $8000 hard limit?
Thanks

FAQ : How do I calculate the mortgage for an EEM?

Solution Details : Qualify the borrower using standard underwriting requirements and qualifying ratios.
New construction:
For homes built to the 2000 IECC (or retrofitted to meet IECC), ratios of 33 and 45 percent are permitted.
Subtract the cost of the energy package from the sale price (since builder has already included these improvements in the price) and qualify the borrower on the lower amount.
Once borrower and property have been qualified, use the energy rating report and calculate the dollar amount of the cost effective energy package.
The calculation is the lesser of 5% of:
? the appraised value ;or
? 115% of the median area price of a single family dwelling; or
? 150% of the Freddie Mac conforming loan limit (currently $417,000)
Add this amount to the base loan amount, and then calculate UFMIP.
The FHA maximum statutory loan amount for the area may be exceeded by the cost of the energy efficient improvements (and UFMIP).


Yes, they are correct but very few Lenders will go above $8,000 still.
Since FHA doesn't actually lend money , you'll have to check with your lenders on this and not FHA.
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