Bill Would Sweeten Loans for Energy-Efficient Homes

Home buyers purchasing energy-efficient properties could qualify for larger mortgages than their incomes would normally allow under a Senate bill reintroduced Thursday with broad real estate industry support.

The measure would allow lenders to include projected energy savings from efficiency upgrades when measuring the borrower’s income against expenses and the value of the home against the debt. In addition to giving borrowers larger loans in new purchases and refinancings, it could also lower their interest rates.

Senator Johnny Isakson, a Republican from Georgia who worked in the real estate industry for 33 years and introduced the bill with Senator Michael Bennet, a Democrat from Colorado, said that consumers should get credit for energy-saving construction materials, which are often “out of sight and out of mind and are not valued.” Decreasing the amount of energy a home uses, he said in an interview, increases “the amount of dollars in the pockets of the homeowners.”

The government already promotes so-called energy-efficient mortgages under a Department of Housing and Urban Development program. But the proposed legislation would require lenders to take the projected energy savings into account when presented with a qualified energy report. The senators originally introduced the bill in 2011, and although it attracted support from groups across a broad political spectrum — including the United States Chamber of Commerce and the Center for American Progress — it failed to gain approval. The sponsors have broadened its appeal within the real estate industry, chiefly by eliminating provisions that could have penalized older, less efficient homes or those lacking a report based on estimated energy consumption.

Read full text at The New York Times