The RESNET Mortgage Industry Steering Committee has identified the following reasons why the mortgage industry should support energy efficiency:
Increase the volume of mortgage loans
Qualify more first time home buyers for mortgage loans
Reduce the cost of home ownership
Reduce America’s dependence on imported oil and aid the environment
The ability to leverage a home buyer's investment in energy efficiencyincreases the number of qualified home buyers and increases the purchasing power of the consumer. A recent analysis by the Environmental Protection Agency confirmed that energy efficient mortgages can have a dramatic impact on increasing the opportunities for home ownership. The analysis found that an average of 6.8% more families would be able to qualify for a mortgage through an energy efficient mortgage.
Another study published in the Appraisal Journal documented that the market value of a home increases $20 for every $1 decrease in the annual energy costs. According to a recent analysis by the Pacific Northwest National Laboratory building a home to exceed the Model Energy Code would result in an annual savings of $170 to $425. Applying these findings to the analysis published in the Appraisal Journal would equate to an increased home market value of between $4,250 to $10,625.
Fannie Mae, Freddie Mac, FHA and VA have adopted special underwriting guidelines to make financing energy efficiency less burdensome. The energy mortgage guidelines for each secondary mortgage market can be accessed below:
Home Energy Ratings: The Key to Energy Mortgages
Home energy ratings provide a standard measurement of a home’s energy efficiency. Ratings are used for both and new and existing homes. The rating report will include all of the information that you need to underwrite an energy mortgage including the calculation of the monthly energy savings and present value. It makes it easy for a lender!
Thought must be used in choosing a rater to work with. As in any trade, all raters are not the same. Raters have different experience, training and skills. You should not select a rater based solely on price. The following are issues to consider when choosing a home energy rater to work with:
Find out what are the basic services the rater provides. RESNET has adopted a Rating Standards of Practice to define this.
Determine what training and experience the rater has to meet your needs. In addition to receiving a rating score, will your customer require design assistance, HVAC sizing calculations, or construction crew training? Be sure you know that the rater’s skills meet your needs.
With litigation, make sure that your rater carries proper insurance coverage. RESNET has arranged to provide affordable and comprehensive general liability and professional liability insurance coverage for raters. Make sure that the rater you hire is properly insured.
Choosing a RESNET rater member means that you are selecting someone you can trust to objectively provide you with a comprehensive analysis of the home’s major energy systems and components.
RESNET rater members are trained and have demonstrated technical proficiency and have committed to maintain and improve their technical proficiency through continuing education.
Members are committed to conducting ratings in accordance with the RESNET Rating Standards of Practice; abiding by the RESNET Rating Code of Ethics, and disclose any financial interest in the home being rated. Through their membership to RESNET, member raters demonstrate their commitment to technical and ethical quality.
RESNET Ratings provides a relative energy use index called the HERS Index – a HERS Index of 100 represents the energy use of the “American Standard Building” and an Index of 0 (zero) indicates that the Proposed Building uses no net purchased energy (a Zero Energy Building). A set of rater recommendations for cost-effective improvements that can be achieved by the Rated Building is also produced.
|Home Energy Rating System National Accreditation|
A home energy rating from a nationally accredited home energy rating program is necessary for an energy mortgage. The mortgage industry in cooperation with RESNET and the National Association of State Energy Officials have adopted a national accreditation standard for home energy rating systems.
For a listing of accredited home energy rating programs in your visit click on:
Copyright 2012 Ronald Sauve All Rights Reserved
This page was last modified on April 18, 2013