source:
  type: guide
  id: hud-4000-1-ii-l-weatherization
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — l. Weatherization
    (08/02/2018)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part II — l. Weatherization
    (08/02/2018).
  coverage_tier: operative
obligations:
- id: hud-4000-1-ii-l-weatherization-full
  canonical_id: hud-4000-1-ii-l-weatherization-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part II — l. Weatherization
    (08/02/2018)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — l. Weatherization
      (08/02/2018)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'l. Weatherization (08/02/2018) The weatherization product permits
      the Borrower to finance the cost of eligible energy- related weatherization
      improvements, in conjunction with a purchase or refinance. i. Eligibility (A)
      Eligible Programs and Transaction Types Weatherization improvements may be financed
      in conjunction with the following: • Section 203(b) o purchase transaction o
      no cash-out refinance transaction • Section 203(h) Mortgage Insurance for Disaster
      Victims • Energy Efficient Mortgages (EEM) For financing of weatherization under
      the 203(k) Rehabilitation Mortgage Insurance Program, refer to 203(k) Rehabilitation
      Mortgage Insurance Program. (B) Eligible Property Types Weatherization improvements
      may be used on the following property types: • existing Properties (one- to
      four-units) • condominiums (one unit) • Manufactured Housing (single unit) (C)
      Eligible Weatherization Items Eligible energy-related weatherization items include
      the following measures: • air sealing (including weather-stripping doors, caulking
      window and plumbing penetrations) • insulation (attic, floors, walls, basement)
      • duct sealing and insulation • smart thermostats and equipment controls • windows
      and doors • low flow water fixtures • carbon monoxide monitors and other combustion
      appliance safety measures (D) Maximum Dollar Amount The maximum allowable cost
      of energy-related weatherization items that can be financed is: • $2,000 (not
      to exceed actual cost) without a separate value determination; • $3,500 (not
      to exceed actual cost) if supported by a value determination made by an FHA
      Roster Appraiser; or • no limit (not to exceed actual cost) if: II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward
      Mortgages 8. Programs and Products - Weatherization (08/02/2018) Handbook 4000.1
      485 Last Revised: 11/26/2025 o supported by a value determination made by an
      FHA Roster Appraiser; and o a separate on-site inspection is made by an ICC
      RCI or CI. (E) Required Documentation The Mortgagee must document the cost of
      work including the weatherization materials and labor. (F) Maximum Mortgage
      Amount Calculation When determining the Adjusted Value, the dollar limit of
      the energy-related weatherization items may be added to both the sales price
      and the Property Value. (G) Weatherization Combined with Energy Efficient Mortgage
      For existing Properties, energy-related weatherization items may be combined
      with the EEM. (H) Cash-Out The Borrower may not receive cash back from the mortgage
      transaction. If an excess exists, funds must be applied to the principal Mortgage
      balance. (I) Escrows The Mortgagee must establish an escrow account for the
      remaining costs of the energy improvements if the installation of weatherization
      items is not complete by the time of closing for all Mortgages on existing Properties,
      except 203(k). The Mortgagee must establish an escrow account for the remaining
      cost of the energy improvements in accordance with the Repair Completion Escrow
      Requirements. If the costs of the energy improvements and weatherization items
      are part of a 203(k) Rehabilitation Mortgage, then the escrowed amounts of the
      energy improvements and weatherization items must be included in the rehabilitation
      escrow account. Escrows may not include costs for labor or work performed by
      the Borrower (Sweat Equity). (J) Form HUD-92300, Mortgagee’s Assurance of Completion
      When funds to complete weatherization improvements are escrowed, the Mortgagee
      must execute form HUD-92300, Mortgagee’s Assurance of Completion, to indicate
      that the escrow for weatherization improvements has been established. II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward
      Mortgages 8. Programs and Products - Weatherization (08/02/2018) Handbook 4000.1
      486 Last Revised: 11/26/2025 ii. Completion Requirements for Weatherization
      Measures (A) Time of Completion Installation of weatherization improvements
      must be completed within: • 30 Days of the mortgage Disbursement; or • 90 Days
      of the mortgage Disbursement if the improvements are part of an energy package
      for an EEM. The Mortgagee must apply the remaining weatherization escrow funds
      to a prepayment of the mortgage principal if the work is not completed within
      the required time frames. Any funds remaining in the escrow account at the end
      of the improvement period must be applied to pay down the mortgage principal.
      (B) Escrow Closeout Certification After the repair or rehabilitation escrow
      account is closed, the Mortgagee must complete the Escrow Closeout Certification
      screen in FHAC within 30 Days after the escrow account is closed. (C) Inspection
      The Mortgagee or their agent must inspect the weatherization items or obtain
      evidence from a local authority that the system was installed in accordance
      with local requirements. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A.
      Title II Insured Housing Programs Forward Mortgages'
  judgment: false
