RESNET commits to developing a program to educate and engage the mortgage, building, and real estate industries to value home energy performance in U.S. mortgage loans, recruiting 100 industry professionals to participate by 2015. In this effort to improve energy efficiency in the nation's housing stock, RESNET will leverage its energy rating and certification experience, along with data gathered through energy rating 1.3 million U.S. homes, to implement and support this platform.
RESNET will strategically conduct outreach to a diverse group of lenders, builders, and real estate professionals through new and existing channels. The program's curriculum will educate constituencies on cost-effective methods to reduce home energy waste and how such strategies correlate to lessoned risk of mortgage default. In addition, the program will provide resources and information on standardizing processes to further support this industry-wide effort.
July - August 2013: Planning, development, and recruitment of strategic partners begin
September 2013: Outreach initiatives begin, and one-on-one meetings will take place with key targeted trade associations in the mortgage, building, and real estate industries
October 2013: Webpage will be created on RESNET website to promote the program offerings and emphasize the need for energy performance transparency in the housing market and the consideration of energy savings in the mortgage loan; educational resources will also be available on the RESNET website to support this program initiative
December 2013: Direct contacts through e-mails will be sent to thought leaders in the housing and mortgage industries as well as energy and climate advocacy groups; press releases to trade journals and blogs will be developed and sent
January 2014: Develop curriculum to educate mortgage, building, and real estate professionals on program benefits, processes, and administration guidelines
February - December 2014: Recruit lenders to include the energy performance of homes into the mortgage underwriting process as well as appraisers to value the home energy performance documented through home energy ratings; finalize platform to include HERS Index Score in the Multiple Listing Service (MLS)
January 2015: Finalize completion of program for the 100 initially targeted; strategize and develop materials for program expansion
Home energy efficiency offers homeowners and homebuyers a range of benefits, namely through cost-savings on monthly utility bills. Heating and cooling yields some of the highest costs of homeownership, outside of the mortgage loan. While these variables are often the fundamental determinants of home energy efficiency levels, the current mortgage underwriting process does not account for building energy performance; something that could drastically improve home affordability and energy conservation in the U.S.
Consumers are provided with energy savings and cost information when shopping for items, such as automobiles and appliances; however, this information is not provided to Americans upon purchase of a home or utilized during refinancing transactions. It has been shown that energy efficient houses, which received an energy rating, present a significantly lower risk of mortgage default. For already energy efficient homes, mortgages that account for energy performance could allow borrowers greater debt-to-income ratios, thereby giving homebuyers the ability to buy a higher quality home due to lower monthly heating and cooling costs. For homes where energy efficiency can be improved, an energy mortgage could be used to finance energy improvements through future cost-savings in monthly utility bills.
Although there is a range of benefits associated with valuing building energy performance during the mortgage underwriting process, this practice has yet to be adopted and standardized across the mortgage, building, and real estate industries.
RESNET is seeking advocacy partners, implementation partners, and media support
RESNET will provide advocacy support, implementation strategies, and infrastructure development to expand this industry-wide effort