Financing Green Construction
Few people have enough cash on hand to pay for a green building project without help. There are two ways of financing green construction, as this section explains in detail:
Taking out a mortgage that gives you credit for energy efficiency.
Finding tax credits, grants, and rebates to help with some of the cost.
Green Mortgage Options
An energy efficient mortgage (EEM) helps you qualify for a larger loan, because the money you'll save on energy costs gets taken into account right in the mortgage. That means you have more money to put toward a greener, more efficient home. EEMs are an option when you're buying a new home that's LEED- or Energy Star–certified.
If, on the other hand, you're looking to borrow money to make renovations that will improve the efficiency of your current home or one you want to buy, you can apply for an energy improvement mortgage (EIM).
To qualify for an EEM or EIM, you'll need to get a HERS report. No, that's not your wife's or best friend's opinion of the house; it stands for Home Energy Rating Systems. This report, which costs a few hundred bucks (but you may be able to get the seller to pay for it—no harm in asking), weighs factors such as utility rates, insulation, appliances, windows, and the local climate, and rates the house in the following categories:
An Overall Rating Index of the house's current energy efficiency.
A recommendation of cost-effective energy upgrades (that is, upgrades that'll save more money than they cost ...