The “green” mortgage was born in 1979, when President Jimmy Carter signed an executive order directing federally sponsored secondary market institutions to offer consumers incentives for energy-efficient homes.

Green mortgages, or energy-efficient mortgages, allow homeowners to use their commitment to the environment to leverage bigger loans. The concept is based on the premise that a more energy-efficient home will have lower utility bills. That savings can be considered income, allowing a homebuyer to qualify for a bigger loan.

You have to provide a Home Energy Rating System report in order to apply for a green mortgage. HERS reports indicate that your house meets all engergy-efficiency guidelines. The builder can provide proof for a new home.

If you are a homeowner looking to upgrade your home’s energy-efficiency, you can commission a trained Energy Rater to issue a HERS report suggesting efficiency improvements. The Energy Rater can estimate the cost of those improvements, as well as the savings. Cost for the report is usually a few hundred dollars.

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