An energy audit is a detailed assessment that measures how efficiently your home uses energy, serving as a prerequisite for many green loans. These loans, such as the FHA Energy Efficient Mortgage (EEM) or VA Energy Efficient Mortgage, require this audit to ensure funded improvements will effectively reduce energy consumption and costs.
Green loans aim to finance upgrades that make your home more sustainable and comfortable. The audit helps both lenders and borrowers by identifying leaks, outdated systems, and insulation issues that lower energy efficiency. Lenders benefit from reduced risk, as energy savings improve borrowers’ ability to repay, while homeowners receive a detailed report outlining recommended improvements and projected savings.
Energy auditors use tools like blower door tests to detect air leaks, infrared cameras to reveal insulation gaps, and evaluate HVAC systems, windows, and lighting. The audit report prioritizes improvements based on cost-effectiveness and energy savings.
Different green financing options may require such audits, including government-backed FHA and VA loans, conventional Fannie Mae or Freddie Mac green mortgages, PACE financing, and private lender green loan products. These audits support financing for upgrades like sealing air leaks, adding insulation, upgrading to ENERGY STAR® appliances, and installing LED lighting.
Benefits of meeting audit requirements include lower utility bills, increased home comfort, environmental impact reduction, improved home value, and potential access to favorable loan terms.
Common myths about energy audits include misconceptions about cost, necessity, and complexity. In reality, audits often pay for themselves through energy savings and provide important insights into your home’s efficiency.
For a smooth audit experience, homeowners should prepare utility bills, ensure access to key areas, ask questions during the audit, and obtain multiple quotes for recommended improvements.
For more on specific green loan programs, check FHA Energy Efficient Mortgage and VA Energy Efficient Mortgage. To understand related financing options, visit our Green Mortgage page.
Additional authoritative information is available from the U.S. Department of Energy on Energy Audits and the U.S. Department of Housing and Urban Development’s Energy Efficient Mortgages.