Energy Efficient Mortgages Reduce Your Monthly Housing Expenses

When a lender figures the monthly mortgage amount that a buyer can afford whether it’s a purchase or a refinance, the amount is calculated to include principle, interest, taxes and insurance or PITI.  But there’s another cost that is beginning to be taken into consideration—utilities.  If you buy an older home with old single pane windows, old appliances, an old furnace, poor insulation, etc., the monthly cost to own the home can increase dramatically.  If you don’t have the money to replace some of these items immediately you could spend hundreds of dollars more each month on energy   costs.  And if you decide to make some of the improvements or buy appliances on your credit card that just adds to your debt at pretty high interest rates.

But the FHA 203(b) loan, or Energy Efficient Mortgage (EEM) Program can help buyers and refinancers to make their homes more energy efficient and save a considerable amount on their monthly utility bills.  “The EEM Program recognizes that the improved energy efficiency of a house can increase its affordability by reducing operating costs.  Because the home is more energy efficient, the occupants will save money on utility costs” and significantly reduce the amount of money needed each month to operate the home. So here’s how it works.  When you take out an FHA 203 (b) loan you can add up to $8,000 to the loan amount even if it goes over the FHA maximum loan amount or over what you qualify for.  This additional amount is at the same rate as the original loan.  So if you lock in at say, 4.25%.  The additional amount is rolled right into the loan at the same rate. Here are some of the things you can do to improve your home’s value and energy efficiency: New windows, insulation, passive or active solar improvements, heating and air conditioning systems, appliances.  Now needless to say $8,000 won’t cover all these things.  So the borrowers needs to determine what things they want to do and how much it will cost.

Prior to settlement the borrower submits a home improvement energy package and the costs to the lender.  Then a HERS  (Home Energy Rating System) energy rater has to inspect the property to determine whether the cost savings over the life of the loan will be greater than the loan amount.  The buyer, seller, lender or agent can pay for the cost for the inspection.  Once the rating assessment has been done and a satisfactory rating has been determined, the lender can escrow the amount of money in the proposal.  All work must be completed within 90 days. Most lenders don’t even know about this loan or if they do they don’t offer it.  Don’t ask me why.  So I was very happy when I found a wonderful loan officer at PMG Mortgage who made it his business to research the loan and convince his company to offer it to borrowers. Vince Coyle  is ready and willing to work with borrowers on this loan product.

Given the low interest rates right now this loan is an excellent way to get a lot more bang for your energy efficiency buck.  Plus, after you make some of these improvements most states have some tax credits and incentives that you might be eligible for.  Here are the federal tax credits that are available now.



Gayle Fleming


My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.

Incandescents vs LEDs and CFLs Congress Debates

How Many Idiots Does It Take to Change a Light Bulb.  Or, how many members of Congress does it take to screw up a light bulb?  It occurred to me recently that I haven’t changed a single light bulb in three years or more.  And in that three years lighting technology has leapt forward dramatically.  So why then would some members of Congress want to torpedo legislation that many of them actually voted for to phase out the incandescent light bulbs in favor of more energy efficient lighting?  Why would anyone in these tough economic times NOT want to save money on energy costs? Seems like a no brainer to me.  But never fear in this age of absolute idiocy in Congress—yes—a move is afoot to save the incandescent light bulb—EVEN THOUGH the major incandescent light bulb manufacturers have said that demand for these energy suckers has dropped dramatically.  David Schuellerman, a manager for General Electric Lighting, said demand for standard bulbs has dropped by half over the last five years, according to the Miami Herald.

In December of 2007 the Energy Independence and Security Act of 2007 passed by both the House and Senate and was signed into law by then President Bush.  One of the provisions of the bill was to phase out energy hogging incandescent light bulbs and encourage the use of more energy efficient lighting like CFLs and the more expensive, but even more energy efficient LEDs.  Now remember, this legislation passed by both houses of Congress.  Fast forward to July, 2011.  And wouldn’t you know it.  A group of GOP representatives tried to repeal efficiency standards that would go into effect next year—because, according to Florida Congressman Bill Posey, “My constituents overwhelmingly don’t want the government to decide what kind of light bulb they want.’’  Translate, “my constituents don’t mind paying more for energy as long as they have the right to waste it.”  (My translation, of course.)  Fortunately for all of us the effort to repeal the legislation was blocked. But when you have people like Rush Limbaugh and Michelle Bachman calling the ban an assault on personal choice, as if people wouldn’t choose to save money, well now you see the reason for the title of this post.

When I first switched over to CFLs only a few retailers even sold them.  So I knew things had really changed when I saw more CFLs than incandescent bulbs in CVS.  I’ve gotten used to one of the annoying things about CFLs.  When I turn on the lights in my bathroom the four vanity bulbs over my sink do take a minute or two to completely light up.  So, I turn on the light go put on my coffee and come back.  One of the concerns of using CFLs is that they contain mercury and need to be disposed of using special procedures.  But since I haven’t had one go out I haven’t yet had to dispose of one. LEDs are more expensive than CFLs but can last years and years longer and have no mercury issues.  In fact, if you sell a house and have LEDs in any lighting fixtures you can use that as a selling feature since they last up to twenty-five years!  Or you say, “bulbs don’t convey”.

Congressman Bill Posey voted to repeal the repeal the energy efficiency standards in the Energy Independence and Security Act even though a lighting manufacturer in his own district, Lighting Science Group’s Chief Executive, Jim Haworth says that the company has grown from 100 to 350 employees in the last year.  So here’s a question posed by the NRDC’s Bob Keefe.  Does anyone want to go back to iceboxes or the refrigerators of the 1960’s.

I haven’t switched over to LEDs yet only because my CFLs are still lighting my home for a fraction of the cost of an incandescent bulb.  So, as my mother used to say, “if it ain’t broke, don’t fix it.”  And thankfully even though Congress totally blew it on the debt ceiling, so far they haven’t been able to screw up the Energy Independence and Security Act.

Here’s a great post from one of my favorite blogs, re-nest with questions and answers on lighting.

Too Much Stuff

I made a confession on Facebook the other day.  “I have too much stuff”, I posted.  This simple five-word post generated fourteen comments and quite a few “likes”.  Clearly I’m not alone in this dilemma.  Recently I read a short story where the protagonist decided on a whim to leave his family unbeknownst to them, and live in the attic above his garage. (Don’t ask—it was a very weird story)  He began chronicling the stuff in the attic—broken toys, old furniture and clothes—nothing priceless and no understandable memorabilia, begging the question, why on earth was he keeping it.  Let’s face it; this is the question we can all ask ourselves about a fairly substantial portion of the stuff we possess.

Yesterday I reluctantly threw out three or four years of Yoga Journal and Yoga+ Joyful Living magazines that had been collecting inside a beautiful hand woven basket from Ghana. Why reluctantly?  Because I had an irrational fear that there would be some article that I had read or meant to read that I wouldn’t have access to anymore.  Why irrational?  Because every article in Yoga Journal and most in Yoga+ are now online.  Now the basket, a thing of beauty, sits nearly empty.  Nearly because I admit to keeping a few back issues of Ode Magazine.  Ode is now only an online magazine so…well, you know…

One of the comments from my “too much stuff” post was a facetious, “you should move”.  Unlike some people, the fact that I have too much stuff doesn’t automatically trigger the “I need a bigger place” response.  People often say they’ve outgrown their current home.  But many times this doesn’t mean their family has grown, i.e. children or even pets.  It means their stuff has grown.  Wouldn’t it be cheaper to get rid of some of the stuff?  I live in a one-bedroom condo.  I moved here from a small, but still, three level house.  I could use another bedroom for an office and guests, but really—it’s enough space for me.  I have a storage unit that comes with the condo.  A few years ago I hired a professional organizer to help me to sort out my storage unit and get rid of things I no longer needed to store.  I still have the most organized unit in the storage room.

The most obvious thing most of us have too much of are clothes and shoes.  Why is it so hard to purge ourselves of clothes and shoes, the likelihood of which we will ever wear again is very close to zero?  That sweater that I got for Christmas from my sister years ago, which I’ve only worn once and didn’t like, still hangs in my closet.  Why?  The skirt that makes my butt look too big so I never wear it—what is the point of keeping it, pray tell?  The shoes that were dyed to match my mother-of-the-bride outfit have never been worn again—and indeed, the mother-of-the-bride outfit itself.  I’ve been waiting nearly fifteen years for another opportunity to wear it.  The good news is it still fits.

What about collectibles, art, fine china, memorabilia, etc?  We all have things that we deem valuable either for sentimental or monetary reasons or both.  Things that are both sentimental and valuable should obviously not be discarded without serious deliberation.  But things that are valuable but have no sentimental or familial value can just be taking up space.  I had never had a set of fine china.  Years ago I bought a beautiful set of china from an estate sale.  I then bought a set of quilted china storage protectors.  I have never used this china.  Nothing in my life is formal enough to warrant using it.  So guess what?    It’s going.   I love Carnival Glass and started collecting it some years ago.  I think of Carnival Glass as proletariat antiques.  I have a few thousand dollars invested in these beautifully colored vases, pitchers, compotes, candle holders, etc.   But beautiful as these pieces are to me, I’m seriously thinking about selling the entire collection.  I have far less expensive pieces that have more sentimental value that I could never part with.  What do you have in your life that’s just taking up space?  What will you do with it?

How To Get Rid of Stuff

Here are some ways to rid yourself of unwanted possessions:

1.            If you have a lot of stuff and a yard, have a yard sale

2.            Sell it on Craigslist.  But be careful about giving out personal information.

3.            Take everything to the Salvation Army or Goodwill and get a tax deduction.

4.            Just put it outside on the curb.  I often put things outside in the hall of my building and they’re usually gone the next day.  Recent examples: cycling sunglasses, an old but perfectly good television, a working vacuum cleaner, vases from flowers I’ve received, my old Yoga magazines.  You get the picture.

5.            Auction it on Ebay.  I don’t have time for this although this is how I bought most of my Carnival Glass.

6.            Hire a professional organizer who will dispassionately help you to let go and will haul away all the stuff and donate it accordingly.  I recommend Organizing Maniacs  if you live in the DC Metro area.

7.            Watch Hoarders on TV.  That ought to inspire you.

And if you have never seen The Story of Stuff, take 20 minutes to watch it.  This is an eye opening video tells the dirty and compelling story of how our stuff impacts our world.