SAVE Act Would Allow Building Owners to Capture Full Value of Energy Efficiency Improvements
American home buyers and builders are often discouraged from purchasing and constructing energy efficient homes because current mortgage underwriting and appraisal standards fail to account for energy costs and savings that come from energy efficiency improvements. Today’s introduction of the SAVE Act by Senators Michael Bennet (D-CO) and John Isakson (R-GA) will remove these roadblocks to more energy efficient homes and take a first step toward giving consumers an energy rating on homes, similar to “miles per gallon” ratings on cars or Energy Star labels on appliances.
The SAVE (Sensible Accounting to Value Energy) Act promises to improve the quality and security of mortgage lending by accounting for a homeowner’s energy costs with two legislative components. First, lenders will be required to include expected energy costs in debt-to-income qualifying ratios, which test a buyer’s ability to make mortgage payments. This will eliminate the now-hidden risk factor of home energy costs. Second, lenders must also include the value of expected energy savings when calculating the loan-to-value ratio of a mortgage, allowing homeowners to finance the cost of energy efficiency improvements as part of their mortgage.
CNT supports the introduction of the SAVE Act because of its value to home owners. The Act fits with our work to provide people with the information they need to make informed decisions that save them money and benefit the environment. CNT affiliate CNT Energy has a 2-year old program that helps multifamily building owners understand their energy use and make investments to increase energy efficiency and reduce costs by up to 30 percent. Under current mortgage regulations, building owners are unable to reap the full benefits of increased energy efficiency. The SAVE Act will change this by allowing building owners to capture the value of their investments in energy efficiency.
In addition to giving home owners the ability to capture the value of energy efficiency improvements when they sell their homes, the SAVE Act would also help create jobs and protect the environment. More home owners investing in energy efficiency will create more construction and manufacturing jobs to do the work. More home owners making energy efficiency improvements will also reduce the nation’s energy needs and the pollution created by it.
The SAVE Act is supported by a multitude of governmental, commercial, and non-profit agencies, including the U.S. Green Building Council, U.S. Chamber of Commerce, Natural Resources Defense Council, Residential Energy Services Network, Institute for Market Transformation, CNT Energy, and Alliance to Save Energy.
For more information, visit http://www.imt.org/save-act.