What is involved in a home energy report on an Energy Efficient Mortgage (EEM)?

 The purpose of the energy assessment is to identify opportunities for improving energy efficiency and cost-effectiveness. The assessment must be conducted by a qualified energy rater, assessor, or auditor using whole-home assessment standards, protocols and procedure.  Qualified home energy raters/assessors must be trained and certified as one of the following:

  • Building Performance Institute Building Analyst Professional
  • Building Performance Institute Home Energy Professional Energy Auditor
  • Residential Energy Services Network Home Energy Rater 

The report must reflect one of the above credentials by the rater/assessor.
Where applicable, raters, assessors, or auditors must also meet local or state jurisdictional requirements for conducting residential energy audits or assessments, including training, certification, licensure, and insurance requirements.
The home energy report reflects recommendations of energy-saving improvements for the Borrower’s consideration including estimates of energy savings and cost-effective analysis for each of the suggested improvements. The lender must use the information from the home energy report to determine that the cost-effective test is met for the financed energy package. 
On newly constructed housing, the home energy report must identify improvements that are over and above the greater of:

  • the requirements of the 2006 IECC, or a successor energy code standard that has been adopted by HUD for its MPS, pursuant to 42 U.S.C. § 12709; or
  • the applicable IECC year used by the state or local building code for New Construction 

The lender must obtain a copy of the home energy report not greater than 120 Days old. 
For information please visit the Energy Efficient Mortgage Program web page at https://www.hud.gov/program_offices/housing/sfh/eem/energy-r
For additional information see Handbook 4000.1:II.A.8.c.iii-iv  at  https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-04739