First came green homes. Now comes a mortgage to match.

So-called green mortgages are the latest innovation in the push to promote more energy-efficient houses, whose owners enjoy lower utility costs thanks to solar panels, improved insulation, thermopane windows, and other money-saving products. Also called energy-efficient mortgages, they allow home buyers to qualify for larger loans on the premise that they can afford higher monthly payments due to what they save on heat, water, and other utilities.

In effect, the mortgages pass energy savings on to homeowners in the form of increased buying power.

"It's the most efficient way to allow people to capitalize on the value that green homes create," said Lisa Davis, development project manager for Olmsted Green, an energy efficient, 287-unit residential complex being built in Dorchester, "and it has the potential to make places more affordable to people over the long term."

The concept is still in its infancy. And the mortgages are easier to secure at large-scale housing developments that incorporate "green building" construction where energy savings have been documented by engineers. Green financing is harder to come by for energy-efficient, privately owned, single-family homes, since the savings are more difficult to calculate and must be done on a case-by-case basis.

But energy-efficiency advocates, lenders, and housing activists say green mortgages are a small but significant step toward making homes more affordable and reducing dependence on nonrenewable energy sources.

"As energy costs increase, homes that have energy efficiency are going to be better for the home buyer in terms of their financial stability," said Peter Milewski, director of the mortgage insurance fund for MassHousing, which lends money to low- and moderate-income home buyers. "Anything that can reduce and stabilize the cost of energy in this volatile energy environment is a good thing for us to be involved in."

The simplest form of green financing offers discounted closing costs to buyers of energy-efficient homes. In August, for example, Bank of America launched a "green mortgage program," now called the "energy credit mortgage program," which offers $1,000 back to buyers of new construction homes that meet Energy Star energy efficiency requirements.

But green mortgages that let buyers borrow more money are more complicated and are designed to have greater consumer impact.

MassHousing offers its energy-efficient mortgages, which are partially financed by Fannie Mae, through Bank of America and NE Moves Mortgage LLC, the home lending arm of Coldwell Banker Residential Mortgage. Besides Olmsted Green, MassHousing's energy-efficient mortgages are available at Forbes Park, a loft community being built in Chelsea where green initiatives include a power-generating windmill.

Environmentally friendly building products such as bamboo flooring, recycled glass tile, and other luxury upgrades are not enough to qualify a house for green financing. Instead, homes must have features like Energy Star appliances, programmable thermostats, fluorescent light bulbs, geothermal heat pumps, and water submeter systems.

For homes that can demonstrate substantive energy savings, MassHousing will increase a buyer's debt ratio - the maximum percentage of gross monthly income they can borrow - to 45 percent from 41 percent. A savings of even $50 a month could translate into an additional $12,000 to $15,000 of buying power, he said.

In expensive real estate markets, that may not make a major difference, "but it makes buying that house a little more comfortable," said Milewski, who estimates that utility costs account for 10 to 15 percent of average total housing expenses.

MassHousing has financed fewer than 50 green mortgages since the program started in 2003, according to Milewski. About one-quarter of those mortgages were for single-family homes; the rest were for condominiums and housing developments where energy efficiency has been quantified, he said.

Green mortgages are "a great idea," added Peter Dion, director of finance and acquisitions for MassInnovation, the developer of Monarch Loft, an energy-efficient condo complex in Lawrence where home owners will save an estimated 25 to 60 percent on utility costs depending on how warm they keep their units. "In my opinion this is the wave of the future."

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