Introducing the EcoSmart FHA Loan

Introducing the EcoSmart FHA Loan

Senior Loan Officer
Brian Decker
Published on March 28, 2024

Introducing the EcoSmart FHA Loan

When Buying a New Home Don’t Get Blindsided by Your Electric Bill!

In states like California, Arizona, Florida, Massachusetts, Illinois, Pennsylvania, Maine, Nevada, and New Jersey electricity rates have DOUBLED in the last 7 years.  Now the second most expensive cost of homeownership outside the mortgage payment itself is the electricity bill.  There is a tool AI report from Soar Energy that provides a Homeowner or Homebuyer a detailed analysis of their home's energy costs and available incentives for that home for free.  This patent-pending technology has seen its share of media attention from Bloomberg, Fox News, and many other media outlets in the last few months. 

Did you know that energy-efficient home improvements can be easily obtained along with your new home purchase? New homebuyers understand the long-term value of green energy sources, but due to the costs of purchasing their new home, many are unable to buy upgrades immediately. 

With our new EcoSmart FHA Loan, homebuyers will have the opportunity to secure a loan to purchase their new home and have additional money available to upgrade their home to more eco-friendly equipment. This includes upgrades like solar panels, EV chargers, a new roof, smart home technology, and new HVAC items. 

What is the EcoSmart FHA Loan?

For over a year, we’ve been working tirelessly with HUD to develop an FHA financing program for homebuyers who want to add eco-friendly upgrades to their new homes. Unlike previous loan programs, EcoSmart has been simplified to help homebuyers achieve their goals of going green without strict stipulations. With our new EcoSmart program, buyers can borrow an amount higher than the home purchase price with no additional evaluation, analysis, or appraisal required. Home buyers will be eligible to use an FHA loan to tack on up to 20% of the purchase price to pay for energy-efficient upgrades like solar panels, battery storage, inverters, and more. 

Benefits of EcoSmart FHA Loan

  • Fixed-rate Loan
  • Primary home purchase only
  • At least 3.5% down payment
  • Qualified credit scores can be as low as 620
  • Both first-time buyers & repeat homeowners are eligible
  • Can borrow up to 20% above the purchase price 
  • Receive a federal tax credit (cash back) of 30% of the upgrades.  So if you roll in $35,000 for new solar panels, HVAC, and smart home the homeowner receives almost $12,000 back in their pocket! 

How it works

EcoSmart FHA requires at least a 3.5% down payment for the loan. Borrowers can then roll in up to 20% of the purchase price to be included in the original loan amount. These funds will be used to purchase energy-efficient equipment. Borrowers will still be required to pay taxes, insurance, and PMI but will see significant savings on energy costs over time. The program is currently available in 6 states and both first-time homebuyers and repeat buyers are eligible.

Finding an EcoSmart Loan Provider

Whether you are a new home buyer or an existing one, you deserve the opportunity to live a sustainable lifestyle. With energy-efficient equipment delivering both financial and ecological benefits for homeowners, we aim to make green technology accessible for all home buyers through EcoSmart FHA. To learn more about how you can go green in your new home contact Modern Lending's team at 844-4-MODERN.

Senior Loan Officer
Brian Decker Senior Loan Officer
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