Energy Efficient Mortgages?
Could energy efficient home improvements not only save on energy costs, but also lower your mortgage rate?
Shaun Donovan, secretary of Housing and Urban Development — thinks consumers deserve more information on the energy efficiency of the houses they buy, both resale and newly built. And he thinks mortgages should come with lower rates or better terms to encourage purchases and retrofits that save energy.
There’s no doub that energy efficient homes add value in today’s real estate market. “Ultimately, if your energy bills are going to be lower, there ought to be some [mortgage] benefits to that” says Donovan. “If in the long run there’s a cost of $5,000 to upgrade a house that will produce $10,000 in savings over time for utilities, the perfect tool to realize those savings is a mortgage,” he said.
So, what does Donovan have in mind?
Mortgage terms — higher loan amounts for buyers to make energy-conserving improvements, lower mortgage rates for energy-efficient homes — “can be a very powerful tool” in residential energy conservation, Donovan said, and the booming Federal Housing Administration insurance program would be a good place to start.
If in the long run there’s a cost of $5,000 to upgrade a house that will produce $10,000 in savings over time for utilities, the perfect tool to realize those savings is a mortgage,” he said.
The time is now for energy efficient home improvements. It’s gone from being an alternative way of living to almost a prerequisite to a make your home green and energy efficient.
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