As the eco-friendly housing trend continues to grow, mortgage lenders are jumping on the green bandwagon. Many lenders are starting to offer bigger loans or discounts to buyers who choose to make energy-efficient improvements to their home.
The idea of an Energy Efficient Mortgage is not new. In 1979, Jimmy Carter signed an executive order that directed the secondary mortgage companies, like Fannie Mae and Freddie Mac, to offer incentives to green buyers. But few buyers took advantage of the programs until the recent trends towards energy-efficiency.
The concept is simple: Homes that use less energy will have lower utility bills. The money saved can be counted as income, thus allowing the homebuyer to qualify for a bigger loan to increase his home's efficiency.
These loans don't cover any old green update; the updates need to lower the home's energy costs. That means environmentally friendly products like bamboo flooring and recycled glass tiles don't qualify. If in doubt, ask yourself: Will this update save on my energy bill? If not, it's probably not eligible.
To apply for an energy-efficient mortgage, you'll need to get a Home Energy Rating System (HERS) report to measure your home's efficiency. The evaluation rating is on a scale from 0 to 100. A "0" means the home uses an infinite amount of energy (not a good thing) and a "100" means it uses almost no energy (a great thing). The average home built to code minimum typically has a rating of about 80.
Once the inspector looks through the house and gives a rating, you'll get a list of suggested updates. You'll show your report to prospective lenders.
The ProgramsThe simplest energy-efficient programs offer discounts to buyers who are purchasing an eco-friendly home. Bank of America has a Green Mortgage Program which offers buyers a $1,000 credit or an interest rate deduction if their future home meets Energy Star requirements.
Other companies offer discounts for a green lifestyle. Bluegreen Financial, which is based in Orlando, Fla., gives discounts on its broker fee for buyers who buy Energy Star homes and appliances. The company also awards discounts if the buyer works at a green company, drives a biodiesel, electric or hybrid car, or has no vehicle at all. In addition, the company donates 5 percent of its profits to the Rainforest Alliance or the environmental charity of your choice.
The more complex programs offered by Fannie Mae and the Federal Housing Administration incorporate the cost of energy improvements into the cost of the loan. Find an FHA lender, to get started.
To qualify for the FHA's energy-efficient mortgage, the buyer must:

• Make a 3-percent down payment
• Spend more than 5 percent of the purchase price for energy-efficient improvements, not to exceed $8,000
• Make improvements that are cost-effective
• Determine the cost of the improvements and estimate of energy savings from a HERS report. The cost of the report can be financed into the loan

The Fannie Mae program has similar  requirements,  though the rules vary by lender. Once you're approved, your lender will put the money for the improvements in an escrow account. You'll have to pay for the improvements upfront, and you'll be reimbursed after an inspection verifies that the improvements were installed.
There are also several state programs that help homebuyers go green, so be sure to research your area's options.

*"The Lowdown on Eco-Friendly Financing". (n.d.) Home and  Garden Television. Retrieved from, https://www.hgtv.com/design/real-estate/the-lowdown-on-eco-friendly-financing

Everyone's talking about eco-friendly home updates, but what's in it for you? Here are 10 reasons to take the plunge into a greener lifestyle.

1. You'll increase your home's value
There's a growing buzz among buyers about eco-friendly homes. And what's not to like: Green homes use sustainable materials that are better for the environment, and have lower utility bills and healthful air.

That means you'll boost your home's value with big and small eco-friendly projects. So whether you splurge on solar panels or buy an affordable water-saving shower and toilet, you'll have that much-needed edge with buyers when you sell your home.
2. The energy savings will add up
The U.S Department of Energy believes if current buildings were green-improved, the country would use $20 billion less in energy per year. That's not chump change!

You can get your piece of the discounts with your own energy-efficient updates. You'll be surprised at the amount of money you'll save with small updates, like installing tightly sealing insulation.

And while some green updates are more expensive, energy-savers can be cheaper than the power-hogging alternatives. For instance, many homes are built with HVAC systems that are too large. A properly sized system will be cheaper upfront and will save energy later.
3. You'll save money on your water bill, too
Green updates that reduce the amount of water it takes to run a home will certainly save you money, and they can be especially important in states with water-use restrictions such as California, Arizona and Nevada.

Inside the house, Energy Star appliances and water-saving plumbing systems will drastically cut water usage. For instance, toilets built before 1982 use a whopping 5 to 7 gallons of water per flush. Replace the water-guzzler with a high-efficiency model that uses fewer than 1.3 gallons per flush and you'll see almost instant savings.

You can also save money in the yard with a low-flow sprinkler or irrigation system. Less agua can actually help grass by preventing over watering and minimizing weed growth. Your wallet will thank you, and you can still have the greenest lawn on the block.
4. Green homes are durable
Eco-friendly homes might use recycled products, but that doesn't mean they'll wear out sooner. Recycled-content decking, which is made from recycled plastic and wood fibers, can last five times longer than traditional wood decking, and it never needs to be treated or painted.

Durable materials mean you'll spend less time and money maintaining your property; you'll get more money in your pocket when you decide to sell.
5. You'll breathe better air
You know that new car -- or new home -- smell? That's the sweet smell of toxins from building materials slowly seeping out. The air inside a conventional new home can be 10 times more polluted than outdoor air.

Green homes have better indoor air quality than other brand-new and pre-owned homes, making the indoors physically healthier and more comfortable for homeowners. For example, using paints, cleaners and adhesives low in volatile organic compounds (VOCs) reduces exposure to formaldehyde, a known carcinogen. With a few green updates, you can breathe easier knowing that your home's air is clean.

6. You'll get more done
That's right: Cleaner air can help you be more productive. A U.S. Department of Energy study found that poor indoor air quality not only affects your health, it also affects your brain.

The workplace study found that people with better air quality got more done and took fewer sick days. So go green and watch your to-do list dwindle.

7. Your project will create less construction waste
A huge trash bin that's constantly full is a common fixture at a construction site. The Environmental Protection Agency estimates that building waste accounts for about 20 percent of all trash in landfills or about 136 million tons per year. But it doesn't have to be that way. About 85 percent to 90 percent of those materials can be recycled.

Green remodeling and building focus on reducing the waste created during the project and reusing materials whenever possible. Don't ditch the wood from that old barn door; use it as a funky coffee table. Reusing materials will lower your costs, and give your home some personality. If you really can't use something, find a recycled goods company that can. Your old stuff won't help anyone if it's jammed into a landfill.

8. Green homes preserve their surroundings
Building green involves more than just putting some solar panels on your rooftop. An eco-friendly home aims to have the smallest possible impact on its environment.

Green building means working with the land rather than against it. Forget clear-cutting the entire lot; take down only the trees and bushes that would interfere with construction. The remaining trees can help cool the house in the summer and act as a windbreak in the winter.

Using nontoxic adhesives, paints and cleaners will benefit the landscape as your home ages. And locating the home near shopping and other services will keep the amount of driving down -- a win for the entire environment. You'll rest easy knowing your home is healthful for you and Mother Nature.

9. Green homes are designed to be adaptable
A home that's truly built green is built to last. So while you might want to devote an entire room to your pool table in your 20s, you may want to trade it in for a playpen in your 30s. Green homes contain typically open spaces, so it will be simpler to rearrange than remodel.

10. Conserving resources is a top priority
Another core value of green remodeling is conserving natural resources. Green building means looking for recycled or renewable materials that will have a minimal impact on the environment. Using antiques in your home is a great way to create something new without using any new natural resources.

Don't worry, your home's looks don't have to suffer. Many sustainable products look just as good (or better) than their conventional counterparts.

For instance, traditional hardwood floors are beautiful, but they can be from old-growth trees that take decades to grow. The supplies for a bamboo floor can grow in less than a year. Using the fewest possible resources makes environmental sense, and it'll be easier on your wallet, too. 
*"Top 10 Reasons to Go Green". (n.d.). Home and Garden Television. Retrieved from, http://www.hgtv.com/design/real-estate/top-10-reasons-to-go-green​.