Location Efficient Mortgage® (LEM)
A Location Efficient Mortgage® (LEM) is a type of mortgage that recognizes the savings available to people who live in location efficient communities.
The LEM resulted from a three-year long research program in 1995 led by three non-profit organizations: CNT, the Natural Resources Defense Council, and the Surface Transportation Policy Project. Together they have formed a new non-profit organization called the Institute for Location Efficiency (ILE). ILE’s research was funded by the U.S. Department of Energy, the Federal Transit Administration, and the U.S. Environmental Protection Agency, as well as the Nathan Cummings Foundation, the Joyce Foundation, the John D. and Catherine T. MacArthur Foundation and the Surdna Foundation.
On the basis of ILE’s research, in 2003, Fannie Mae, the nation’s largest source of home mortgage funds, sponsored a market test of the LEM. In consultation with ILE, Fannie Mae defined the guidelines of the current LEM mortgage product, agreed to invest at least $100 million in LEMs, and authorized lenders to issue LEMs in four metropolitan market areas.
Note: As of 2011, Location Efficient Mortgages are currently not being offered.