The Sensible Accounting to Value Energy (SAVE) Act was reintroduced to the senate recently, giving home-buyers the opportunity to qualify for larger mortgages for purchasing energy-efficient properties. The bill would provide more flexible federal mortgage underwriting rules, meaning mortgage loans would include projected energy savings from efficiency upgrades when measuring the value and affordability of the home. In addition to larger loans, it could also lower a buyer’s interest rates.
It was Senator Johnny Isakson (R-Ga.), who introduced the bill with Senator Michael Bennet (D-Co.). After working in the real estate industry for 33 years, Senator Isakson said that consumers should get credit for energy-saving construction materials because decreasing the amount of energy a home uses increases “the amount of dollars in the pockets of the homeowners.” Senator Bennet said a household’s average energy costs can run over $70,000 over the course of a 30-year loan and energy-efficient investments such as insulated hollow-core doors, double-pane windows and insulated floor-joist systems above crawl spaces can reduce the average home’s bill by at least 30 percent.
The bill was originally proposed in 2011, but failed to gain approval. Since then, sponsors have attempted to broaden its appeal within the real estate industry, primarily by removing penalization of older, less efficient homes without energy consumption reports. Proponents of the bill hope it will pass, according to the New York Times: “the changes could curtail energy use, reduce greenhouse gas emissions and increase the market for conservation upgrades.”
A recent survey by the National Association of Home Builders, according to the Institute for Market Transformation (IMT), found that 91 percent of homebuyers said an energy-efficient home is desirable or essential, but home owners have been hesitant to “go green” due to costly upgrades, which weren’t previously considered in their mortgage loan. Now, they may join the cause. The bill could help promote energy conservation and construction jobs and generate $1.1 billion a year in savings for consumers by 2021. In fact, an analysis by the American Council for an Energy-Efficient Economy and IMT found that the SAVE Act would add 83,000 net new jobs in the construction, remodeling, and manufacturing sectors. According to IMT’s Executive Director, Cliff Majersik, “The SAVE Act is an important complement to other lending reforms made in the aftermath of the mortgage crisis.”
Bill Would Sweeten Loans for Energy-Efficient Homes, nytimes.com
Senators Bennet and Isakson Reintroduce SAVE Act, imt.org