How Homebuyers Can Add Cost Effective Energy Upgrades Into Their Mortgage
By Amy DeBusk Home Loans
What if your mortgage could actually help lower your monthly expenses over time?
That's exactly what an energy efficient mortgage is designed to do.
I'm Amy DeBusk, a Branch Manager with over 25 years of experience, and I work with buyers in Roseville, Auburn, and across Northern California who are looking for smarter ways to make homeownership more affordable, not just at closing, but long term.
An energy efficient mortgage allows you to finance improvements like insulation, HVAC upgrades, and even solar into your home loan, helping reduce utility costs while improving the overall performance of your home.
For buyers in Roseville, Auburn, and throughout Northern California, energy efficient mortgages can be a powerful way to reduce long term housing costs while improving comfort and home value.
What Is an Energy Efficient Mortgage?
An energy efficient mortgage allows you to finance the cost of energy-saving improvements as part of your home loan.
Instead of paying out of pocket or using high-interest financing, the cost of upgrades is rolled into your mortgage and spread out over time.
These improvements must pass a cost effectiveness test, meaning the projected energy savings should offset the added cost of the loan over time.
Why This Matters in California
In California, where energy costs continue to rise, reducing your monthly utility expenses can make a significant difference in your total housing cost.
For many buyers in Roseville and Auburn, this means:
- Lower overall monthly expenses
- More predictable long-term costs
- Improved home value over time
Energy efficient mortgages shift the focus from just purchase price to the true cost of owning a home.
Think of Your Mortgage Like a Shopping Cart
Imagine this. You have found a home you love in Roseville or Auburn and placed it in your mortgage shopping cart. Before you check out, you walk through one special aisle filled with upgrades that help your home operate at a higher level.
With an Energy Efficient Mortgage, approved upgrades can be added directly into your mortgage as long as they pass the required cost effectiveness test. This means you finance everything together in one payment instead of taking out a second loan or draining funds out of pocket.
This is the type of strategic, high vibration decision that sets buyers up for long term comfort, lower utility bills, and greater financial empowerment.
Another piece that often gets overlooked is your interest rate. Even a small difference there can change your payment more than most buyers expect.
FHA EEM: A Bigger Cart With More Room
The FHA Energy Efficient Mortgage is one of the most flexible tools available for first time homebuyers. Here is what makes it powerful.
- You do not have to re qualify your income for the EEM portion.
This is one of the biggest advantages. You qualify for the base FHA loan. The energy improvements are added only if the audit supports them. - FHA allows a generous formula.
You may finance up to 5 percent of the lesser of the adjusted value, 115 percent of the median area price, or 150 percent of the national conforming loan limit. - Upgrades are completed after closing.
Funds are held in escrow and released once the work is verified. Typical completion time is around 90 days.
For many homes in Roseville, Rocklin, Granite Bay, and throughout the Sacramento Valley, this program allows meaningful energy upgrades that make an immediate difference in comfort.
Typical FHA EEM packages range from twenty thousand to thirty thousand dollars.
VA EEM: Ideal For Targeted, High Impact Upgrades
For Veterans and active duty military, the VA Energy Efficient Mortgage is an incredible tool for improving home performance through focused upgrades.
Here is how it works.
- Zero to three thousand dollars in improvements can be financed with itemized bids.
• Three thousand to six thousand dollars can be approved if the projected utility savings exceed the increase in payment.
• Over six thousand dollars requires a VA determination that the improvements add sufficient value.
VA borrowers can complete the upgrades within six months after closing. This allows flexibility, clarity, and a simple path for important improvements like attic insulation, duct sealing, thermostat upgrades, and air sealing.
At Amy DeBusk Home Loans, we follow VA guidelines exactly as written. We do not impose additional overlays or rules. Veterans experience a faster, smoother loan process without unnecessary steps or surprises.
New Real World Examples: Homes In Roseville And Auburn Ideal For EEM Financing
To help you visualize exactly how FHA and VA Energy Efficient Mortgages work in real life, here are four homes currently listed that make excellent EEM candidates.
These examples show how different homes benefit from upgrades and how you can evaluate potential improvements with clarity and confidence.
Roseville Example 1
1618 Oakview Dr, Roseville CA 95661
List price around 489,000
3 bedrooms, 2 bathrooms, 1,523 sq ft, built 1977
This home is described as the classic "grandma's house with good bones," and that is exactly what makes it a perfect EEM case study. The seller has already updated some major systems, including a newer HVAC system and a newer water heater, but the home still behaves like a 1970s structure.
EEM Opportunity:
Because the big mechanicals are newer, the EEM is focused on optimizing the envelope and distribution system for comfort and efficiency.
Potential EEM upgrades for illustration:
- Attic insulation top off and whole home air sealing
- Duct sealing and balancing to complement the HVAC system
- Smart thermostat installation
- LED lighting package
- Weatherstripping at exterior doors
- Ventilation improvements
An FHA EEM could allow roughly twenty thousand to twenty five thousand dollars for upgrades if the audit supports it.
A VA EEM could allow three thousand to six thousand dollars for core improvements like insulation and duct sealing.
This example shows how a well loved older home can be elevated in comfort and performance without stretching a buyer's budget.
Roseville Example 2
2017 N Cirby Way, Roseville CA 95661
List price around 499,000
3 bedrooms, 2 bathrooms, 1,200 sq ft, built 1978
This charming 1970s home has been cosmetically updated with new flooring, paint, and refreshed interior finishes. However, there is no mention of energy upgrades like insulation, duct sealing, or high performance ventilation.
This creates the perfect contrast between "move in ready" and "move in comfortable."
Potential EEM upgrades:
- Attic insulation and attic air sealing
• Comprehensive duct sealing and return air improvements
• Smart thermostat
• LED lighting
• Bath fan upgrades with timers
• Optional solar if the audit shows cost effectiveness
How FHA and VA EEM fit here
FHA could provide around twenty thousand to twenty five thousand dollars depending on the audit.
VA could provide three thousand to six thousand dollars of improvements focused on air sealing and duct work.
This example lets you tell the story of a buyer who falls in love with the look and layout of a home, then uses an EEM to enhance the comfort and long term savings behind the walls.
Auburn Example 1
121 Aeolia Dr, Auburn CA 95603
List price around 480,000
3 bedrooms, 2 bathrooms, 1,008 sq ft, built 1940
This 1940s Auburn vintage charmer is exactly the type of home where an Energy Efficient Mortgage can create a powerful transformation. Small footprint homes benefit significantly from targeted energy upgrades because the work is efficient and cost effective.
Potential EEM upgrade highlights:
- Attic insulation brought to modern standards
• Whole home air sealing, especially around old framing gaps
• Duct sealing and airflow balancing
• High efficiency heat pump or condenser upgrade
• Smart thermostat and LED lighting
• Ventilation improvements to support indoor air quality
An FHA EEM may allow between fifteen thousand and twenty thousand dollars of upgrades on a home at this price point if the audit supports it.
A VA EEM could still allow three thousand to six thousand dollars toward the highest value improvements like insulation and duct sealing.
This example allows you to tell a story of honoring the vintage charm of a home while giving it the modern comfort and efficiency it deserves.
Auburn Example 2
252 Poet Smith Dr, Auburn CA 95603
List price around 525,000
3 bedrooms, 2 bathrooms, 1,380 sq ft, built 1977
This home already features a new roof with warranty, fresh paint, a new water heater, a newer HVAC system, and a whole house fan. The updates make it attractive and functional, yet it still retains the energy profile of a 1970s home behind the walls.
Potential EEM upgrades:
- Advanced attic air sealing
- Attic insulation top off
- Duct testing and sealing
- Smart thermostat installation
- Weatherstripping and selective window improvements if supported by the audit
This example is ideal for comparison. The buyer sees a beautifully updated home and then uses an EEM to elevate comfort, efficiency, and long term savings.
What Most Buyers Don't Realize
One of the biggest misconceptions is that energy-efficient upgrades are expensive add-ons.
When structured correctly, these improvements can actually lower your total monthly cost by reducing your utility bills.
Many buyers are surprised to find that improving energy efficiency can make homeownership more affordable, not more expensive.
When an Energy Efficient Mortgage Makes Sense
This type of loan can be a great fit if:
- You want to reduce long-term utility costs
- The home needs energy upgrades
- You prefer financing improvements instead of paying upfront
- You are considering solar or efficiency upgrades
It may not be the best option if:
- The home is already highly efficient
- You prefer to pay for upgrades out of pocket
- The improvements do not create meaningful savings
This is why I help buyers evaluate whether the numbers actually make sense before moving forward.
FHA vs VA EEM Rules Explained In Plain English
Energy Efficient Mortgages can sound technical, but the rules are straightforward when presented clearly.
FHA EEM:
- You qualify for the base FHA loan.
- The EEM is added only if the audit supports it.
- You may finance up to 5 percent of the applicable limit.
- Funds are escrowed.
- Work is typically completed within 90 days.
VA EEM:
- Zero to three thousand dollars can be financed easily.
• Three thousand to six thousand dollars requires proof of savings. - More than six thousand dollars requires a VA value determination.
- Work can be completed within six months.
Both programs allow you to make meaningful improvements without taking a separate loan or increasing the complexity of your financing.
If you're comparing this with other loan options, it helps to see how different programs actually fit together. I walk through how Dream For All and CalHFA compare here.
VA Termite and Wood Destroying Insect Requirements In California
VA loans in California require a wood destroying insect inspection as part of the Minimum Property Requirements. If active issues like termites or fungus are found, they must be corrected. The accepted inspection report is either the California Structural Pest Control Board WDO report or the NPMA 33 form.
At Amy DeBusk Home Loans, we do not add unnecessary overlays. We follow VA guidelines exactly. This results in faster closings, smoother experiences, and a more empowered process for our Veterans.
The Step By Step EEM Process With Amy DeBusk Home Loans
Working with my team means you never move through this on your own. Every step is guided, explained, and handled with care so the entire Energy Efficient Mortgage process feels smooth and stress free.
Here is exactly what your journey looks like:
1. Free forty-five-minute Zoom consultation
We talk through your goals, comfort priorities, and the type of home you want to buy. This helps us understand whether an EEM can increase your comfort, reduce utility costs, or stretch your buying power.
2. Pre approval and personalized loan strategy
We review your full financial picture and determine whether FHA or VA EEM gives you the strongest benefit. You'll know your payment, your budget, and how much EEM financing you may qualify for.
3. Professional home energy assessment
We connect you with trusted local HERS raters who complete a full evaluation of your future home. They inspect insulation, duct systems, ventilation, heating and cooling efficiency, and areas where comfort can be improved.
4. Cost effectiveness testing
Every upgrade must pass the EEM cost effectiveness rules. We run the calculations to make sure each improvement provides enough energy savings to qualify. This ensures your upgrade list is accurate and fully compliant.
5. Contractor bids and escrow setup
We help you gather realistic contractor bids and build the upgrade budget. The funds for upgrades are placed into a controlled EEM escrow account so the money is fully protected and used only for approved improvements.
6. Underwriting and appraisal coordination
My team manages the documentation, calculations, and communication with the lender and appraiser. This includes verifying the improvements, updating the appraisal with EEM allowances, and clearing all underwriting requirements.
7. Closing and post closing upgrade installation
Once the loan closes, contractors begin the approved improvements. We verify completion, gather required paperwork, and ensure everything meets EEM standards before the escrow is released.
8. Move in and enjoy a higher performing home
Your home now feels more comfortable, uses energy more efficiently, and supports lower utility costs long term. The best part is that the improvements were financed into your loan rather than paid out of pocket.
This is MortgageMadeEasy in action
A guided, transparent, step by step process that helps you buy a home you love and make it even better.
Important Considerations
Not all lenders actively offer energy efficient mortgage options, and the process may require additional steps such as an energy assessment.
Working with a lender who understands how to structure these loans is important to ensure everything is done correctly.
❓FHA and VA Energy Efficient Mortgages in Roseville and Auburn FAQs
❓ What is an Energy Efficient Mortgage and how does it help me as a buyer?
An Energy Efficient Mortgage allows you to add approved energy upgrades into your mortgage without taking out a separate loan. This helps you improve comfort, lower utility bills, and increase your home's long term performance while keeping your financing simple.
❓ Do I have to requalify for the FHA EEM add on?
No. With FHA, you qualify for the base loan only. The energy improvements are added on top if the audit supports them. This keeps the process smooth and stress free for first time buyers.
❓ How much can I finance with an FHA Energy Efficient Mortgage?
Most FHA EEMs end up in the twenty thousand to thirty thousand dollar range, depending on the home, the audit, and FHA's guidelines. This creates room for meaningful upgrades that truly improve comfort.
❓ How much can I finance with a VA Energy Efficient Mortgage?
The VA program typically allows zero to three thousand dollars without extra documentation and up to six thousand dollars if the projected energy savings exceed the increase in payment. Larger amounts require a VA value determination.
❓ What types of upgrades usually pass the cost effectiveness test?
Air sealing, attic insulation, duct sealing, high efficiency heat pumps, heat pump water heaters, smart thermostats, and LED lighting frequently pass. Solar can also qualify when the audit proves long term savings.
❓ Will adding energy improvements delay my closing?
Not when the process is handled early. When we order the energy audit and collect contractor bids at the beginning, the loan stays on track and closes on time.
❓ Can the upgrades be completed after closing?
Yes. FHA allows approximately 90 days to complete the work, and VA allows up to six months depending on the project. The funds are held in escrow until the work is verified.
❓ Is an EEM worth it for older homes in Roseville or Auburn?
Absolutely. Homes built in the 1940s through the 1980s often have outdated insulation, ductwork, and mechanical systems. Even modest upgrades can dramatically improve comfort and reduce monthly utility costs.
An Energy Efficient Mortgage allows you to add approved energy upgrades into your mortgage without taking out a separate loan. This helps you improve comfort, lower utility bills, and increase your home's long term performance while keeping your financing simple.
No. With FHA, you qualify for the base loan only. The energy improvements are added on top if the audit supports them. This keeps the process smooth and stress free for first time buyers.
Most FHA EEMs end up in the twenty thousand to thirty thousand dollar range, depending on the home, the audit, and FHA's guidelines. This creates room for meaningful upgrades that truly improve comfort.
The VA program typically allows zero to three thousand dollars without extra documentation and up to six thousand dollars if the projected energy savings exceed the increase in payment. Larger amounts require a VA value determination.
Air sealing, attic insulation, duct sealing, high efficiency heat pumps, heat pump water heaters, smart thermostats, and LED lighting frequently pass. Solar can also qualify when the audit proves long term savings.
Not when the process is handled early. When we order the energy audit and collect contractor bids at the beginning, the loan stays on track and closes on time.
Yes. FHA allows approximately 90 days to complete the work, and VA allows up to six months depending on the project. The funds are held in escrow until the work is verified.
Absolutely. Homes built in the 1940s through the 1980s often have outdated insulation, ductwork, and mechanical systems. Even modest upgrades can dramatically improve comfort and reduce monthly utility costs.
Try Our New DPA GPT App for Instant Answers About Down Payment Assistance
If you are exploring ways to make homeownership more affordable, you will love our brand new DPA GPT App. This easy to use tool gives you instant, personalized answers about down payment assistance programs, credit requirements, income limits, grant options, and strategies to qualify faster.
You can download it right to your phone and ask questions any time. It feels like having your own mortgage expert in your pocket.
What you can ask the DPA GPT App:
• Which down payment assistance programs you qualify for
• How much assistance you may receive
• Minimum credit score requirements
• First time buyer rules
• How DPA works with FHA and VA loans
• How to stack grants and assistance for maximum benefit
• What steps to take next to get pre approved
The DPA GPT App is designed to support you, simplify the process, and help you take confident steps toward homeownership with clarity and ease.
Learn Even More About EEM Loans and Smart Homeownership on Our YouTube Channel
If you love learning at your own pace, you will enjoy the energy and clarity inside our YouTube community. We created a full playlist dedicated to helping buyers understand Energy Efficient Mortgages, down payment assistance, first time buyer strategies, and today's most important loan programs.
Inside this series, you will find videos that make complex topics feel simple. You will hear stories from real buyers, learn step by step how EEM loans work, and discover smart upgrades that can improve comfort and reduce long term costs. Every video is designed to help you make confident, informed decisions as you move toward homeownership.
Subscribe to the channel so you never miss a new episode.
You will also be the first to know when we release new tutorials, product deep dives, and high vibration guidance to support you on your journey.
Your homeownership journey becomes easier, clearer, and more empowered when you surround yourself with good information. Our YouTube channel is here to guide you every step of the way.
Ready To See Your Personalized EEM Upgrade Cart
At Amy DeBusk Home Loans, we make Energy Efficient Mortgages simple, friendly, and transparent. When you send your property address, utility provider, and upgrade wish list, I will model FHA and VA EEM options side by side and show you exactly what passes, what doesn't, and how much you can finance.
This is how you turn a good home into a great home.
Send these three items to get started:
• Property address
• Utility provider
• Upgrade wish list
You can also access powerful tools that support your journey to homeownership:
- Personalized buying plan
- Home Readiness Course for first time buyers
- Down payment savings game: Play SaveBo
- Community for buyers
Step into homeownership with clarity, confidence, and a high vibration mindset. Your future home is already calling you forward.
All loans are subject to approval. Equal Housing Lender.
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