Hamilton Herald Masthead


Front Page - Friday, October 23, 2020

‘Green’ mortgages offer energy-efficiency benefits

Attention to energy usage has increased as residents of the Tennessee Valley have spent more time at home this year.

Energy efficient, or “green,” mortgages can offer homeowners and homebuyers opportunities to purchase homes that utilize energy-efficient technologies through mortgages that permit higher debt-to-income ratio requirements.

Higher home energy costs can translate into higher utility bills. Freddie Mac recently reported that household electrical usage in late March was about 22% higher than in 2019 at the onset of stay-at-home orders, with midday consumption (between 10 a.m. to 3 p.m.) rising approximately 35%.

Depending on local utility costs, this would equate to an approximate $25 increase in monthly utility bills in the month of April.

To help homeowners increase the energy efficiency of their homes, there are two types of energy-efficient mortgages available for homeowners and homebuyers.

An energy-efficient mortgage gives homebuyers a credit for existing energy-efficient upgrades, usually in the form of higher debt-to-income ratio limits or a lower interest rate due to lower expected utility costs.

Alternatively, an energy improvement mortgage can be used to finance energy improvements to existing homes to increase their energy efficiency.

Energy mortgages are available through federally insured mortgage programs such as the Federal Housing Administration and the Veterans Affairs, and also through conventional secondary mortgage markets like Fannie Mae and Freddie Mac.

To reduce energy consumption and utility bills, homeowners can consider several upgrades, including energy-efficient appliances, HVAC units, windows and doors, as well as the addition of air sealing, insulation, solar panels or geothermal heating.

Not only can such energy-efficient upgrades help decrease monthly utility costs, but a study Freddie Mac released last year has also shown that such features and green-building certifications can increase a home’s market value.

For information, including specific questions to ask your homebuilder, visit homeperformancecounts.info. Home Performance Counts is a joint initiative between the National Association of Home Builders and the National Association of Realtors to help homeowners better understand the rapidly growing high-performance home marketplace.

To find a professional who can help you, visit HBAGC.net.