Friday, June 19, 2015

Factoring energy efficiency costs into home mortgages in the U.S.

The Energy Efficiency Improvement Act of 2015, passed in the U.S. this spring, includes provisions to support a program to improve energy efficiency practices in commercial buildings and require federal agencies to utilize energy assessments in their leased buildings. It is expected, that in near time energy efficiency legislation also will be extended to include incentives for federal mortgage underwriters to take into account energy efficiency in the process of valuing homes.
Recently there has been a growing interest by homeowners to improve energy efficiency - over 1.2 million existing homes were upgraded to become more energy efficient between 2009 and 2012. Many lending institutions are seeing the value of providing loans for energy efficiency measures. A research, conducted in the University of North Carolina at Chapel Hill, indicates  that homeowners with energy-efficient homes are less likely to default on their mortgages.  Therefore, mortgage underwriters could consider factoring energy efficiency into their lending practices. This idea has support from business leaders, such as the U.S. Chamber of Commerce, as well as from consumer groups and environmental organizations.