How the VA Energy Efficient Mortgage (EEM) Can Help You Upgrade Your Home Without Paying Out of Pocket

If you're a Veteran or active-duty service member using a VA loan to purchase a home, you already know the VA loan is one of the most powerful benefits available to you. But there's one under-the-radar feature of the VA loan that most buyers—and even many lenders—aren’t familiar with:

👉 The VA Energy Efficient Mortgage (EEM)

This small but mighty program allows you to finance energy-efficient upgrades to your home as part of your VA home loan—even if you’re putting 0% down. It's a smart, strategic tool to help lower your utility bills, increase long-term value, and reduce your carbon footprint.

🔍 What Is the VA Energy Efficient Mortgage (EEM)?

The VA EEM is an add-on to your existing VA loan. It lets you roll up to $6,000 of approved energy-efficient improvements into your home loan—even if the purchase price is already at the appraised value.

In short: the VA allows you to borrow slightly more than the purchase price to make your home more energy efficient, without paying out of pocket.

💸 How Much Can You Borrow?

There are three tiers:

• Up to $3,000 requires minimal documentation—usually just contractor quotes or itemized estimates.

• Between $3,001–$6,000 requires showing that the improvements will result in monthly utility savings that offset the added loan amount.

• Over $6,000 is possible but requires a full energy audit and more extensive justification, which most buyers don’t pursue.

✅ What Improvements Qualify?

Here are common upgrades approved under the VA EEM:

• Solar water heaters or photovoltaic systems

• Smart thermostats and HVAC system upgrades

• Weather stripping or caulking

• Attic or wall insulation

• Dual-pane windows

• Energy-efficient doors

• Storm windows/doors

• High-efficiency water heaters

• Solar attic fans

💡 Note: Cosmetic upgrades or appliances (like washers/dryers) don’t qualify—this program is strictly for improvements that boost energy efficiency.

🛠 Real Example: How One VA Buyer Used the EEM in Mililani

One of my recent Coast Guard clients bought a fixer-upper in Mililani using a 0% down VA loan. The home needed repairs, but thanks to smart negotiating, we secured $70,000 in seller credits and also added on a $3,000 VA EEM to fund solar attic fans, LED lighting upgrades and energy-efficient appliances. These upgrades will reduce their monthly utility bills while increasing long-term value—without any money out of pocket.

🧭 Why It Matters in Today’s Market

In a high-cost market like Hawaii, every dollar counts. The EEM can help stretch your purchasing power, especially if you're buying an older home that needs work. It’s a great way to make your home more comfortable and sustainable without dipping into your cash reserves.

🎯 Final Thoughts

If you’re a VA buyer considering a home that needs some energy updates—or just want to be more efficient—ask your lender and Realtor (👋) about using the VA EEM. It’s a powerful but underutilized benefit that could make a big difference in your monthly budget and long-term comfort.

Have questions about using your VA benefits to buy a home in Hawaii—or anywhere nationwide?
I specialize in helping service members and Veterans navigate the buying process, from PCSing to house hacking with VA loan benefits.

📲 Let’s connect and talk strategy.