FHA To Introduce Green Loans:

Additional Incentives For Energy Efficient Homes Coming

This past year the federal government has increased incentives for home energy-efficiency through increases in tax credits for solar panels, solar water heaters, geothermal heat pumps, heavy-duty insulation, windows, air conditioning and other similar home enhancements.

This appears to be the beginning of a much larger push by the government towards green housing. At the Department of Housing and Urban Development, a new generation of energy-efficient mortgages will soon be rolled out, starting with FHA loans that offer 5 percent larger mortgage amounts to people who plan to undertake energy-efficiency improvements.

Under these new loans, for example if you qualify for a $200,000 FHA mortgage to purchase a standard house,  FHA lenders might now might be able to offer you $10,000 more upfront -- a $210,000 loan amount -- if the extra money is used to substantially lower the property's annual energy consumption.

Additional incentives are also being considered, including giving applicants credit on their qualifying incomes for a home loan in exchange for documentable savings in annual energy expenditures.

In addition, the House of Representatives has also passed a massive energy-conservation and emissions-control bill. Among other items, this bill contains a subsection devoted to creating incentives for consumers and federal agencies to build and finance more energy-efficient dwellings.  This plan will include initiatives for:

- The FHA is directed to insure a minimum of 50,000 new energy-efficient mortgages during the coming three years. An energy-efficient house is defined as one in which energy consumption is reduced by 20 percent after renovations.

- Fannie Mae and Freddie Mac are directed to develop new mortgage products and more flexible underwriting guidelines to reward energy-conscious borrowers and builders.

Plans to also help establish a secondary market for energy-efficient and location-efficient mortgages for moderate- and lower-income homebuyers for conventional and FHA loans are currently being pushed. This new generation of loans would increase the qualifying incomes of applicants by at least one dollar for every dollar of projected energy savings from renovations, green construction or efficient design.

There are also many more complex elements to the proposed changes including initiatives to have these properties properly valued by appraisers, state government intervention and moving homes to a more energy efficient grid altogether and away from traditional energy sources that will be part of the future of "green" loans.

Some of these plans may take effect soon, while others may take much longer to roll out. However, it appears that the future will put an emphasis or at least some incentive on a "greener" home. As programs begin to roll out we will provide additional information and details.

For more information on mortgage programs, rates and information  for potential and current homeowners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com