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The SAVE Act advocates suggest that taking energy efficiency into account can deliver a better house with a lower monthly mortgage payment.


Under SAVE, federally backed lenders (who underwrite 90% of U.S. home loans) can determine a home’s energy use either by using the DOE’s Residential Energy Consumption Survey (adjusted based on home square footage), or through an independent energy auditor. 


 


As I’ll explain, changing the way homes are built and mortgages are underwritten and appraised could be a complicated and time-consuming process. However, federal guidance providing uniform procedures for how energy costs and energy-saving features will be handled for all federally insured or owned mortgages could greatly simplify and accelerate this transition.


Legislation in Progress
Over the past year, an unprecedented coalition has been formed to support a proactive legislative initiative. Put simply, this new law will require energy costs and efficiencies to be considered in the underwriting and appraisal procedures for any federally owned or insured mortgage originated after January 1, 2015.


Known as the Sensible Accounting to Value Energy Act (SAVE), the legislation will be introduced soon by Senator Michael Bennet (D-CO). This legislation enjoys the support of a diverse coalition of interest groups, ranging from leading environmental groups to major business groups in Washington D.C. (see list, facing page). SAVE has three key provisions, designed to accelerate the growth of the green housing market:
1. Value for Energy Savings. SAVE requires mortgage underwriting criteria to be updated to consider energy costs along with principal, interest, taxes and insurance when calculating total cost of homeowners hip. As shown in the illustration above, expected energy costs can be derived from a third-party energy inspection or the Department of Energy’s Residential Energy Consumption Survey.


 


WANT TO JOIN THE CAUSE?
Gathering the political support necessary to pass federal legislation is never easy. As experts in the home building and energy efficiency, we will need to be actively engaged in pushing for passage of the SAVE Act. Here are three things you can do today to ensure that the SAVE Act becomes law.


1. Educate your professional acquaintances and customers about the benefits of the SAVE Act.


2. Encourage your trade or professional association to endorse the SAVE Act.


3. Contact your congressperson and senators and urge them to sponsor the SAVE Act. —Clayton Traylor

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