Bipartisan Legislation Introduced in the U.S. Senate to Incorporate Energy Performance into the Mortgage Loan

June 6th, 2013 - Posted by RESNET under RESNET News

On June 6, 2013, Senators Michael Bennet (D-CO) and Johnny Isakson (R-GA) reintroduced the Sensible Accounting to Value Act of 2013 (the SAVE Act).  The legislation will rationalize the American mortgage underwriting process by including a home’s expected energy cost savings when determining the value and affordability of energy efficient homes.  To view the legislation go to SAVE Act

Section 4 (c) (2) (C) (i) of the bill recognizes RESNET and Home Energy Ratings stating that an option to determine energy savings would be “in accordance with the Residential Energy Service Network’s Home Energy Rating System (commonly known as ‘‘HERS’’) by an individual certified by the Residential Energy Service Network.”

Similar legislation was introduced in the last session of Congress but did not pass in the Senate due largely to the lack of support from the National Association of Realtors and the National Association of Homebuilders.  The chances of the legislation passing this Congress has been considerably enhanced by the fact that now both the National Association of Realtors and National Association of Homebuilders support the bill.  Both organizations worked with the Senate sponsors to craft the new legislation.

Another development that enhances the opportunity of the SAVE Act in Congress this session is the study that the Institute for Market Transformation commissioned with the University of North Carolina that found that that on average, mortgage default risks were 32 per cent lower on ENERGY STAR labeled homes that were rated by a certified RESNET Home Energy Rater.  This study clearly demonstrates that an energy efficient home presents a safer mortgage loan.  For more information on the study go to Lower Mortgage Risks with Energy Efficient Homes

RESNET supports this legislation.  If enacted it will at no cost to taxpayers or the federal deficit:

  • Enable more secure mortgage underwriting
  • Provide affordable financing for home energy improvements through the mortgage loan
  • Reduce utility bills for homeowners
  • Boost job creation in the housing industry

For more information on the SAVE Act including a listing of the broad coalition supporting the legislation go to SAVE Act Factsheet

Tags: , , , , , , , ,

Previous post:

Next Post: