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Freddie Mac: Working from Home, Higher AC Bills & the Beauty of EE Loans

Aug 26, 2020

Freddie Mac, the government sponsored large secondary mortgage market, has posted a feature on the effects on energy consumption with millions of American working at home, “Working from Home, Higher AC Bills and the Beauty of Energy Efficient Loans”.

The feature states, “With millions of people working remotely amid the COVID-19 pandemic, homes have turned into makeshift office by everyone from single adults to parents with kids of all ages entertaining themselves online.  This ripple effect of the pandemic is spiking residential electricity consumption and utility expenses. It’s also introducing potential problems for energy suppliers and distributors, reminding homeowners of the benefits of generating electricity from solar.”

Freddie Mac in the story explores the changes in patterns of energy use across the nation.

The post also explores the benefits of making energy efficiency improvements to homes, HERS® ratings and energy efficiency mortgages.

In terms of HERS® ratings, the feature states, “Freddie Mac found that homes sold for more if they had been rated on the amount of, and how efficiently they use, energy. The better the ratings, the higher the potential savings on utility bills. The study, which looked at homes rated by RESNET’s Home Energy Rating System (HERS), found that:

• On average, homes with HERS® ratings sold for 2.7% more than unrated ones.

• Homes with better HERS® Index scores sold for 3-5% more than lesser-rated homes.

Homeowners can benefit from more in-depth ratings because of more sophisticated testing equipment. Raters can better quantify the return on expenses in reduced utility costs, lower energy usage, and how much new windows, an insulated attic or new air ducts increases a home’s market value.”

The story includes a quote from RESNET Executive Director Steve Baden, “The tech advances have really surged to the point where homeowners can know how much they can reduce bills. This way, they have this sophisticated cost-benefit breakdown to decide what’s worth spending money on.”

The feature also explores how mortgage financing can help borrowers remain long-term homeowners. Freddie Mac states, “While other loan options exist to pay for home improvements, funding energy upgrades through refinancing comes with practical benefits for lenders and borrowers. It’s done in a single transaction with only one set of closing costs and fees, saving time and money for both parties. This kind of mortgage innovation can also help borrowers with buying a home deemed as energy efficient.”

To download the feature go to Working from Home, Higher AC Bills and the Beauty of Energy Efficient Loans