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Green Home Renovating: Pay it Forward

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What exactly is green home renovation? No, it doesn’t involve painting your home avocado green or turning it into a terrarium.

Any improvements you make on your home that result in using fewer of the earth’s limited natural resources and cuts down on waste are steps towards green renovation. To begin, there are some quick fixes which can be done in an afternoon, like fixing leaky pipes, putting in some energy-efficient light bulbs, and caulking your windows and doorways. These are all no-brainers. But in order to really transform your home into an energy-efficient, money-saving powerhouse, you’re probably going to have to do some major remodeling.

And as we all know, major home improvement costs major bucks, and even though it all pays off in the end (think lower electric bills), you will still have to come up with some cold hard greens in order to get the ball rolling. Luckily, there are options for homeowners who are strapped for cash. (And who isn’t?)

Get a Green Mortgage. An Energy Efficient Mortgage (EEM) is a loan which you borrow against your home – a form of refinancing. In order to qualify for this loan you need to hire an EEM-certified home surveyor to ascertain what kind of upgrades are needed to make your home enviro-friendly, and how much they will cost. You decide which changes you’re willing to make and head for the bank. In the market for a new house? Consider applying for an EEM before you sign on the dotted line.

PACE funding. Properly Accessed Clean Energy (PACE)  is similar to an EEM; only instead of borrowing against your home you pay the loan back through property taxes over a fixed amount of time – usually about 15-20 years. Though the government has always embraced the PACE program and rewarded its participants, it has not been well received by lending institutions such as Fannie Mae and Freddie Mac, who set forth a strict pay-back policy on PACE borrowers who decide to refinance their homes or sell.

Looking to buy a fixer-upper? The HUD 203K program allows you to consolidate all moneys needed to make that home yours into one loan. That means that all borrowing needed to purchase a home, to make it inhabitable, and to set your fixed mortgage thereafter will all be reflected in one bill – on the condition that renovations meet the HUD Cost Effective Energy Conservation Standards. In other words, they won’t pay for a new entertainment room, but they will help you insulate it.

For more information about obtaining an EEM see this list of lenders.

More info on the PACE program can be found on their website.

Find out about the HUD 203K by visiting their government site.

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