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Christian Science Monitor Reports on Energy Efficient Homes Representing a Lower Mortgage Loan Risk

Apr 30, 2013

The public awareness of the HERS Index Score has been heightened by a story in the Christian Science Monitor.  The story, “Energy Efficiency Means Lower Utility Bills, Less Mortgage Risk” focuses on the University of North Carolina study that the risk of mortgage default is one-third lower for energy efficient homes.

The story states that, “Specifically, homes with lower Home Energy Rating System (HERS) Index Scores overall showed a lower mortgage default risk, while Energy Star-labeled homes showed a 32% lower mortgage default risk.   The HERS index is the brainchild of the Residential Energy Services Network (RESNET), which is a nationally recognized system for inspecting, testing and calculating a home’s energy performance. The intention is to give buyers a better idea of a home’s energy efficiency before purchasing.”

The paper quotes RESNET Executive Director Steve Baden, “the report will be a real game-changer.  The finding that the lower the HERS Score, the lower the mortgage risk should increase consumer, builder, lender, real estate agent and appraiser confidence in the HERS Index Score. In light of these findings, RESNET calls on the mortgage industry to rationalize the underwriting process to take in consideration energy savings in the mortgage loan,”

The article concludes that “US households spent about $230 billion annually on energy—and that’s not counting transportation. Some analysis suggests that residential energy efficiency—within the realm of the existing possibilities—could save over $40 billion annually.”

The story is posted at Christian Science Monitor HERS Index Score