June 10, 2013 | By Barbara Vergetis Lundin

A bipartisan bill, the Sensible Accounting to Value Energy (SAVE) Act, has been reintroduced that could improve access to mortgage financing for energy efficiency.

On average, home utility bills are larger than either real estate taxes or homeowner's insurance, yet they are not included in federal mortgage underwriting rules, making it difficult for homeowners to finance the up-front cost of improvements. But with no tax increase, fees, or mandate, the SAVE Act would remove the barriers to finance and increase the supply of energy-efficient homes and renovations.

According to a recent survey by the National Association of Home Builders, 91 percent of homebuyers see energy-efficient homes as desirable or essential for their families. The bill would allow homeowners to achieve this for their families by providing more flexible federal mortgage underwriting rules, including a home's expected energy cost savings when determining the value and affordability of the home. This could be a major motivator for homeowner's energy conservation efforts and should be an instrumental part of an energy company's conversation with them.

 

"A recent study of more than 70,000 mortgages found that mortgages on energy-efficient homes were 32 percent less likely to be in default," said Cliff Majersik, executive director of the Institute for Market Transformation (IMT). "The study provides strong evidence that the SAVE Act is good credit policy and would help protect lenders and taxpayers from the risk of mortgage default."

The bill has garnered wide ranging support from the National Association of Realtors, the National Association of Manufacturers, the U.S. Chamber of Commerce, the National Association of Home Builders, the Natural Resources Defense Council, the Alliance to Save Energy, the Appraisal Institute, the Consumer Federation of America, and the Center for American Progress.

For more:
- see this report

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