When owning an eco-friendly home is one of your top priorities, you need a home loan that is just as serious about going green as you. With a green home loan from PrimeLending, you can finance your long- and short-term energy efficient home goals.

What is a green home loan?

A green home loan is a type of mortgage that can help you finance eco-friendly and energy efficient, a.k.a. “green,” updates and/or repairs to your current home or a home you plan to purchase. A green home loan can simplify the mortgage process by rolling the financing for purchase and repair costs into one loan. There are several types of loans that can be used to finance green renovations, including:

  • FHA loans — Backed by the Federal Housing Administration (FHA), this loan is popular among first-time homebuyers as it requires a smaller down payment and has more flexible credit requirements. The FHA also offers renovation loans — FHA 203k — in full/standard and limited options to help homeowners make both large and small energy conserving renovations.
  • USDA loans — Another option is the USDA loan, backed by the United States Department of Agriculture (USDA), which was designed as a mortgage alternative for rural homebuyers. This loan offers 100% financing which means borrowers don’t have to make a down payment and has a lower standard interest rate, both of which could help borrowers afford to make any necessary energy-efficient home updates.
  • Conventional loans — Available in fixed- and adjustable-rate options, conventional loans often have additional credit and financial requirements to meet. That said, if qualified borrowers can make at least a 3% down payment, this loan can offer more flexible terms and fewer restrictions than other loans.
  • Jumbo loans — When you need a loan for an amount that exceeds conforming limits regulated by Fannie Mae and Freddie Mac, a jumbo loan could help you purchase your next home. With the higher loan amount afforded by a jumbo loan, a homebuyer could use the funds for things like energy-saving appliances and solar panels.
  • Renovation loans — A renovation loan can help you make green upgrades to your existing home or, depending on the mortgage, purchase and renovate your next home. Popular Loan options designed to renovate older homes are the HomeStyle and CHOICERenovation loans offered by Fannie Mae and Freddie Mac, respectively.

How can I use a green mortgage?

Borrowers can utilize a green home loan on a home they currently own. However, a green mortgage can also be used to purchase a home that you plan to make green improvements to. Whether a green mortgage is used to renovate a home or purchase and repair a new one, borrowers can use the funds to invest in energy efficient upgrades that can include:

  • Energy-efficient windows and doors
  • Solar panels
  • Roof, floor, or wall insulation
  • Energy-saving HVAC systems and appliances

Financing your green home goals is a journey, and it’s always better to have someone you can trust by your side. Whether you have questions about green home loans or general mortgage questions, your local PrimeLending loan officer can guide you through every step of the process. Contact your local PrimeLending loan expert today to get started.