In the past, mortgage lenders have refused to factor energy savings into the value of the home. This could possibly change in the future --The SAVE (Sensible Accounting to Value Energy) Act bill in the US Senate could help borrowers purchasing an energy efficient home get a larger mortgage.
The proposed bill is set to improve the accuracy of mortgage underwriting used by Federal mortgage agencies by ensuring that energy costs are included in the underwriting process. (Source: http://www.govtrack.us/
The bill tells lenders (backed by Fannie Mae, Freddie Mac and FHA) to account the amount of the expected energy cost savings. Those savings will be subtracted from the borrowers expenses - which will be factored in the monthly mortgage payment.
The expected energy savings will also be added to the value of the home in the appraisal. Since the mortgage amounts are based on a percentage of the value of the home, this would allow the borrowers to get a bigger mortgage. (Source: http://www.cnbc.com)
The proposed bill will only be applicable to federal government backed loans. To qualify for a larger mortgage, borrowers must submit a qualified energy report. The bill under consideration will also remove penalties against homes that do not have an energy rating.
With the new legislation, green homes will be more appealing to the home
buyers because of the energy cost savings and the possibility of a
higher mortgage. While home sellers will also benefit in investing in
green technology because homes with green technology will have a higher resale value -- when they
decide to sell.
If you have any questions, please feel free to contact me.
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