Frequently Asked Questions

1. What is ENERGY STAR?

2. What are ENERGY STAR qualified homes?

3. How does a home qualify for ENERGY STAR?

4. What is an Energy Efficient Mortgage (EEM)?

5. Who underwrites Energy Efficient Mortgages?

6. In general what allows a home to qualify for the $2,000 builder tax credit?

7. How does a rater determine if a home qualifies for the tax credit?

8. Who can qualify for the new homes tax credit?

9. What qualifies as a new energy efficient home?

10. Do homes eligible for the Energy Star label also meet the requirements for the tax credit?

11. Can a homeowner apply for the tax credit?

12. Can multi-family homes be eligible for the tax credit?

13. What’s the difference between a tax credit and tax deduction?

14. Can I get an energy rating on my existing home?

15. Are there energy efficiency incentives for existing homes?

Answers

1.    ENERGY STAR is the government-backed symbol for energy efficiency. It identifies new homes, commercial buildings and more than 40 types of products that are energy efficient. ENERGY STAR is a voluntary partnership between the Environmental Protection Agency, the Department of Energy and more than 9,000 organizations, including more than 2,500 of the nation’s homebuilders. back to top 

2.    Homes that earn ENERGY STAR certification are significantly more efficient than standard homes. ENERGY STAR qualified homes can save homeowners hundreds of dollars annually on their energy bills while delivering more comfort and helping protect the environment. Homes that have earned ENERGY STAR perform better due to a number of energy efficient features including:

• Effective insulation

• High performance windows

• Tight construction and ducts

• More efficient heating and cooling equipment

• More efficient water heater

• ENERGY STAR qualified lighting, appliances, and programmable thermostats

• Third-party inspection and testing performed by Southern Energy Solutions. back to top 

3.    A home that earns the ENERGY STAR must first receive a third-party verification by a qualified home energy rater that certifies compliance with the Environmental Protection Agency’s strict guidelines for energy efficiency.  Southern Energy Solutions provides this service. back to top 

4.    Energy efficient mortgages (EEM) have special underwriting guidelines that can make it easier for borrowers to qualify for a loan to purchase a home featuring cost-effective energy efficient improvements. One common EEM allows the lender to increase the borrower’s annual income by a dollar amount equal to the estimated energy savings. back to top 

5.    Fannie Mae, Freddie Mac, FHA and VA each offer energy efficient mortgages. back to top 

6.    To meet the energy saving requirements, a home must use no more than 50% of the energy used by a home built to 2004 International Energy Conservation Code (IECC) standards. back to top 

7.    The only way to determine if a home will qualify for the tax credit is to have an analysis done using an approved IRS software program. back to top 

8.    An eligible contractor who constructs a qualified new energy efficient home may qualify for the credit.

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9.    The home qualifies for the credit if:

- It is located in the United States

- It meets the statutory energy saving requirements as noted in number 2 above

- It is acquired from an eligible contractor before January 1, 2009 for use as a residence. back to top 

10.   No. The requirements to meet Energy Star and the tax credit are different. Qualification for Energy Star covers all energy use in a house, including water heating, lighting and appliances, while requirements for the tax credit only include space heating and cooling. back to top 

11.   No. Only eligible contractors can apply for the tax credit. back to top 

12.   Yes. The IRS defines all homes are eligible for the tax credit as long as the building is not more than three stories above grade in height. back to top 

13.   Tax deductions reduce taxpayer’s overall taxable income with the value dependent on the payer’s tax bracket.  Tax credits reduce the amount a taxpayer owes dollar for dollar. Tax credits are more valuable than deductions.

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14.   A certified home energy rater can perform testing services on an existing home and provide a performance rating. This rating is similar to the EPA mileage sticker found on new cars and indicates a home's energy use value. Southern Energy Solutions' HOME ENERGY AUDIT is often used for this purpose. back to top 

15.   Yes, there are energy efficiency incentives for improving existing homes. Refer to the Energy Efficiency Incentives page on this web site for further information, or contact Southern Energy Solutions. back to top