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7 Best Lenders for Energy-Efficient Mortgages

See NerdWallet's picks for the best energy-efficient mortgage lenders across different categories.

By Abby Badach Doyle  

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An energy-efficient mortgage, or EEM, helps homeowners finance energy-efficient homes or renovations. When financing a renovation, the cost of energy-efficient upgrades is rolled into your mortgage payment. That means you can enjoy lower utility bills sooner, instead of waiting to tackle energy-saving projects over time.

EEMs are available when buying a home or refinancing your existing mortgage. You can also use an EEM to buy a home with existing energy-efficient features. NerdWallet picked some of the best energy-efficient mortgage lenders in a variety of categories so you can determine which one is right for you.

Note: Star ratings shown in the list below are each lender's overall star rating.

Best Lenders for Energy-Efficient Mortgages

Chase
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Chase: NMLS#399798

4.5

NerdWallet rating 
Chase

Min. credit score

620

Min. down payment

3%

Why we like it

Good for: borrowers who want a wide selection of loan products, an in-person experience and comparatively low interest rates.

Pros

  • Carries a wide variety of mortgage types and products, including DreaMaker and Standard Agency mortgages, with down payments as low as 3%.

  • Offers low rates compared with other lenders, according to the latest federal data.

  • Offers a customizable mortgage calculator for personalized rate and payment estimates.

Cons

  • Doesn't offer home improvement loans, such as FHA 203(k) and HomeStyle.

  • You have to speak with a home loan adviser to complete the application.

  • Home equity lines of credit (HELOC) are currently unavailable.

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Freedom Mortgage
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Freedom Mortgage: NMLS#2767

4.0

NerdWallet rating 
Freedom Mortgage

Min. credit score

620

Min. down payment

3%

Why we like it

Freedom offers a typical range of home loan options, but rates are not available on its website.

Pros

  • Offers conventional, FHA, VA, USDA and jumbo loans.

  • Multiple customer service options, including brick-and-mortar branches, online message center and phone.

  • Low average mortgage interest rates and origination fees, according to the latest federal data.

Cons

  • No mortgage rates displayed online.

  • Does not offer home equity loans or lines of credit.

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loanDepot
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loanDepot: NMLS#174457

4.0

NerdWallet rating 
loanDepot

Min. credit score

620

Min. down payment

5%

Why we like it

Good for: borrowers who want an easy online application and a variety of loan types to explore.

Pros

  • Has branches across the country for customers who prefer face-to-face service.

  • Receives high marks for customer satisfaction, according to J.D. Power and Zillow.

  • Mortgage interest rates tend to be on the lower end, according to the latest federal data.

Cons

  • Mortgage rates aren't available online; you'll need to contact a loan officer.

  • Doesn't offer home equity loans or lines of credit.

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Network Capital
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at Network Capital

Network Capital: NMLS#11712

4.0

NerdWallet rating 
Network Capital

Min. credit score

620

Min. down payment

3%
Learn more

at Network Capital

Why we like it

Good for: borrowers looking for a lender with online convenience and mortgage banker assistance.

Pros

  • A good selection of loan products, including government-backed FHA and VA mortgages.

  • Provides “same-as-cash” loan that allows borrowers to compete with cash offers.

  • Online application process is clear and simple to follow.

Cons

  • Doesn't lend in all states.

  • Website doesn’t provide customized mortgage rates.

  • Lender fees are on the high side, according to the latest federal data.

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New American Funding
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at New American Funding

New American Funding: NMLS#6606

4.5

NerdWallet rating 
New American Funding

Min. credit score

620

Min. down payment

3%
Learn more

at New American Funding

Why we like it

Good for: First-time home buyers and other borrowers looking for a broad array of loan choices.

Pros

  • Offers a wide variety of purchase and refinance mortgages with an emphasis on helping underserved communities.

  • Its home equity line of credit can be used for an owner-occupied or second home.

  • Offers a program to enable buyers to make cash offers.

Cons

  • Mortgage origination fees tend to be on the high end, according to the latest federal data.

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Veterans United
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Veterans United: NMLS#1907

4.0

NerdWallet rating 
Veterans United

Min. credit score

620

Min. down payment

0%

Why we like it

Good for: veterans, active-duty service members and eligible reservists looking for VA loans.

Pros

  • Offers 24/7 customer service over the phone.

  • Offers a free credit counseling service.

  • Mortgage rates are on the low side, according to the latest federal data.

Cons

  • Doesn’t offer home equity loans or HELOCs.

  • Veterans United has physical branch offices in only 17 states.

  • Focus on VA loans, so may not be the strongest choice for those seeking other loan types.

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Watermark Home Loans
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Watermark Home Loans: NMLS#1838

4.0

NerdWallet rating 
Watermark Home Loans

Min. credit score

620

Min. down payment

3%

Why we like it

Good for: borrowers looking for a solid selection of loan types with some not-so-standard options, such non-QM loans.

Pros

  • Online capabilities include a full application, as well as loan process updates.

  • Offers low rates compared with other lenders, according to the latest federal data.

Cons

  • Watermark’s mortgage interest rates are not published online.

  • Watermark says it offers HELOCs, but no details are available online.

Read Full Review

What is an energy-efficient mortgage?

An energy-efficient mortgage helps buyers finance a home that is energy-efficient, or can be made so through home improvements. With an EEM, buyers may be able to qualify for a larger loan or better terms because lenders factor in the savings of lower energy bills. 

To qualify for an EEM, the home must undergo a home energy assessment. A certified professional calculates the home’s current energy efficiency and recommends which energy-saving improvements would be the most cost-effective.

After reviewing the assessment, the lender approves a list of projects. The cost of those improvements, such as new windows or solar panels, can be rolled into your mortgage. That might mean a higher monthly mortgage payment, but offset by lower utility bills, it’s possible for homeowners to save money overall.

» MORE: Choosing an ethical mortgage lender

Types of energy-efficient mortgages

EEMs are available as home purchase loans or refinance loans. There are a variety of options, including conventional mortgages and government-backed loans insured by the Federal Housing Administration and the Department of Veterans Affairs. Each type of EEM has its own limit for the value of energy-saving upgrades you can roll into the mortgage.

  • Conventional energy-efficient mortgages include Freddie Mac’s GreenCHOICE Mortgage and Fannie Mae’s HomeStyle Energy mortgage. Each of these allows borrowers to finance energy-efficient upgrades costing up to 15% of the home’s “as complete” appraised value, or the value of the property when all recommended improvements are made.  

  • VA energy-efficient mortgages are available to veterans, service members and eligible spouses. Borrowers can use a VA EEM to finance up to $6,000 in energy-efficient improvements. Unlike a conventional EEM, a VA EEM is not a standalone home loan product. It must be used alongside a VA home purchase loan or interest rate reduction refinance loan (IRRRL), and the loans must close at the same time.

  • FHA energy-efficient mortgages can be used for new or existing construction, as well as condominiums and manufactured homes. You can see guidelines for FHA EEMs on the Department of Housing and Urban Development website. 

» MORE: Best lenders for FHA loans

What can I upgrade with an energy-efficient mortgage?

Conventional, VA and FHA energy-efficient mortgages each set guidelines for allowable upgrades, but many common projects are on all three lists. If you’re not sure what’s allowed, ask your mortgage lender for details. Energy-efficient improvements financed through an EEM can include:

  • Heating, ventilation and cooling systems (HVAC).

  • Energy-efficient windows and doors.

  • Low-flow water fixtures (e.g. toilets, showers).

  • Home insulation.

  • Energy-saving appliances, such as refrigerators, washers and dryers.

  • Renewable energy, such as solar, wind or geothermal systems.

» MORE: Best mortgage lenders

More from NerdWallet:

Last updated on December 15, 2022

Methodology

The star ratings on this page reflect each lender's overall star rating. Read more about how we determine those ratings. The lenders on this page are chosen using this methodology:

NerdWallet reviewed more than 50 mortgage lenders, including the majority of the largest U.S. mortgage lenders by annual loan volume (lenders had to have at least a 1% market share), lenders with significant online search volume, and those that specialize in serving various audiences across the country.

For inclusion in this roundup, lenders must have an overall score of 4 or higher and offer energy-efficient mortgages for home purchase, refinance or both.

NerdWallet solicits information from reviewed lenders on a recurring basis throughout the year. All lender-provided information is verified through lender websites and interviews. We also used 2021 Home Mortgage Disclosure Act data for origination volume, origination fee, rate spread and share-of-product data.

To recap our selections...

NerdWallet's Best Lenders for Energy-Efficient Mortgages