An under-utilized program that has been in existence since 1995 can help home buyers save on their utility bills by letting them fold the cost of energy improvements into their mortgage.

The program, Energy Efficient Mortgage, can be used by homeowners with both Federal Housing Administration (FHA) and Veterans Administration (VA) loans.

In California, homes built before 1978 stand to benefit the most from such improvements, because 1978 is the year when builders were required to start incorporating energy-efficient building techniques.

To be eligible for an Energy Efficient Mortgage, the projected energy savings have to be greater than the cost of the work.  The savings are calculated using the Home Energy Rating System (HERS) index, which calculates what the average energy usage would be in the home once the improvements are made compared to a similar home that did not have the work done.

For more information about the HERS index, and how it can be used to measure a home’s energy efficiency, visit the California Energy Commission’s website at