Energy-Efficiency Promoted with New Home Owner Bill

Energy-Efficiency Promoted with New Home Owner Bill

iStock_000019699963XSmallThere are a lot of reasons to install energy-efficient improvements in your home, not least of which includes saving money on your bills each month. Soon, a new bill could promote more energy-efficiency among home owners by offering mortgage-underwriting guidelines that factor in cost savings for energy-efficient improvements. These include things like appliances, building materials, etc.

Known as S. 1106, the new bill is being sponsored by Senators Michael Bennet (D-Colorado) and Johnny Isakson (R-Georgia). It’s already been referred to the Senate Banking Committee, who will review it and decide if it becomes law.

Living a green lifestyle appeals to people for a variety of reasons, but for home owners that invest money in energy-efficient improvements, it can be hard to get fair market value. That’s because appraisers, lenders, and buyers often fail to factor these eco-friendly upgrades into a home’s value. But many MLS services offer “green fields,” where buyers can seek out homes with green features, which shows just how important these amenities are.

Unsurprisingly, S. 1106 has already garnered support from a number of real estate industry groups who feel strongly about the benefits for homeowners. The bill includes a feature with an affordability test and a loan-to-value adjustment, both of which would be optional.

According to the Appraisal Institute, S. 1106, “Would instruct federal loan agencies to assess a borrower’s expected energy costs when financing a house. The U.S. Department of Housing and Urban Development would issue updated underwriting and appraisal guidelines for any loan issued, insured, purchased or securitized by the Federal Housing Administration or any other federal mortgage loan insurance agency.”