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

The Borrower must obtain a home energy assessment.  The purpose of the energy assessment is to identify opportunities for improving energy efficiency of the home and their cost-effectiveness.


The improvements can include energy-saving equipment, and active and passive solar and wind technologies.  The energy package can include materials, labor, inspections, and the home energy assessment by a qualified energy rater.  If the Borrower desires, labor may include the cost of an EEM Facilitator (project manager).


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; or

•             energy rater, assessor or auditor who meets local or state jurisdictional requirements for conducting residential energy audits or assessments, including training, certification, licensure and insurance requirements.

The report must reflect one of the above professional credentials by the rater/assessor.


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 energy-savings 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 following:

•             the requirements of the latest energy code standard that has been adopted by HUD through a Federal Register notice; 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 Section II.A.8.c.iii-iv available 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