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Mortgages For Greening Your B&B

February 7, 2011

by Kit Cassingham

Get financial help greening your bed and breakfast with an energy efficient mortgage. It's a 2nd mortgage designed to help you take energy conserving measures in a renovation, or even new build, to improve the operations of your bed and breakfast. Long-established and little publicized, this is a great program for those wanting to run a truly green B&B.

As a B&B innkeeper, what do you do to help protect the environment? What green actions do you take? Recycling, reducing consumption, composting, energy and water conservation, CFLs and natural daylighting, and avoiding pesticides are among the things innkeepers undertake. However, steps like home renovations or utility upgrades to be more environmentally conscious may seem financially out of reach to the average bed and breakfast. Ah, that's where green mortgages come into your life.

Green mortgages may be the answer to your greening the inn's structure. They are also known as Energy Efficient mortgages (EEMs), and were designed to help you pay for renovations to your home without having to take out a second mortgage. Originating during the Carter Administration in the late 1970s, this isn't a new product. It is funded through various government sources like Freddie Mac and Fannie Mae, as well as FHA and VA.

Qualifying for the first mortgage automatically qualifies you for an EEM. Better yet, no additional down payment needed for the EEM, either. For further information about what an EEM can do for you, shop at the usual lending institutions - banks, mortgage companies, and other lending organizations. Anyone can lend EEM funds.

Energy efficient mortgages allow you to borrow more money to invest in upgrades for a new or older home. The resulting savings is considered to be a kind of income, helping justify the larger loan. EEMs also help you qualify for more borrowed money to buy a home that already has green upgrades.

Renovations that qualify for this funding might include upgrades such as double paned windows, new insulation, a new dishwasher and/or washing machine, an energy efficient or tankless water heater, an energy efficient HVAC, or an alternative energy system (like wind, solar, or geothermal). The idea behind EEMs is that people who have environmentally efficient homes can afford a larger mortgage because they are spending significantly less on their utilities.

Some facts to help you take this step:old windows account for nearly 25 percent of annual heating and cooling costs due to energy lossnew energy-efficient dishwashers save up to 1200 gallons of water every year, which also accounts for saved energy>

  • 50 to 70 percent of all the energy used in the average American home is for heating and cooling
  • >>
  • about 20 percent of air in centrally heated and cooled homes is lost due to old or faulty ductwork
  • increasing your insulation may save up to 20 percent on heating and cooling, if not totally remove the need for heating and cooling
  • Saving energy is an important part of running a green bed and breakfast. The same is true with water conservation, which closely relates to energy savings - a possible argument for including water-saving devices in your loan. Financial savings, resource conservation, and guest comfort are three great reasons to upgrade the building(s) you use for your bed and breakfast.

    To apply for an EEM you'll need to have a Home Energy Rating System (HERS) report which will share that your inn will meet all energy-efficiency guidelines (as of this writing the cost of a typical report is a few hundred dollars). Or, if you have new construction, your builder can provide the necessary information. What's not clear is how tightly "home" is defined. Does a B&B qualify for this kind of financial help? My research didn't answer that question, so you'll have to conduct your own research as you search for purchase or renovation loans.

    My thoughts and feelings are you don't have to let the lack of money hold you back from greening your inn from top to bottom. The savings you will experience will not only pay for the little extra mortgage expense, but also attract guests who will be more comfortable staying with you at your green bed and breakfast.




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