You can finance energy improvements with your mortgage with programs from Fannie Mae, Freddie Mac, FHA, VA, and Rural Housing. Also, most state-chartered housing finance agencies offer “green mortgage” programs and incentives for refinancing or new purchases.

Mortgage qualifying rules for energy-efficient homes have been expanded by mortgage agencies due to the potential savings in utility costs, and because they are less expensive to own. Certain programs will let you borrow up to 15% over the cost of your home, and these include purchases with 3% percent down payments.

Let’s say you wish to buy a home for $300,000, and finance $30,000 in energy improvements. If the lender’s appraiser can validate an increase in value that covers the retrofit, your real estate transaction will be structured for $330,000. The seller still receives $300,000, and your lender will disburse the $30,000 in costs directly to the contractor.

With a 5% down payment, this scenario would only require an extra $1,000 in cash towards the down payment, and your monthly payment for principal and interest would increase about $90, based on a 30-year mortgage at 4.00% interest.

Learn more in Live in a Home that Pays You Back