The green mortgage was born in 1979 when President Jimmy Carter signed an executive order directing federally-sponsored secondary market institutions to offer consumers incentives for energy-efficient homes.
Why must it take SOOO long to get something that makes this much sense into the public eye?
Energy efficient mortgages are one of the most beneficial and under-utilized programs the consumer can find and capitalize upon in today's real estate market.
EEM product features I've heard of:
- EEMs are available for new home purchases, old homes purchases and refinances.
- Allows borrowers to finance the cost of adding energy-efficient improvements to new or existing homes as part of their purchase or refinancing mortgage.
- Up to $200 of the cost of a home energy rating may be included in the mortgage.
- When purchasing an energy-efficient home, a lender can stretch the borrower’s debt-to-income ratio by 2 percent.
- A lower interest rate.
- A discount on closing costs and/or origination fees.
- Paying for the cost of the home energy rating.
- A home buyer can finance 100 percent of the energy efficiency improvements without increasing the down payment.
The feature that makes the most sense to me and I would think that every lender could offer is the stretching of a borrower’s debt-to-income ratio by 2+/- percent. The money saved in utility costs due to the homes energy efficiency allows the homeowner pay a larger monthly payment. This is just basic common sense and could help buyers get qualified.
Where are they?
So why aren't they being promoted? Why aren't mortgage brokers/lenders advertising with them to differentiate themselves from the competition? Especially in the current market when they should be providing extra services to buyers who can actually get qualified.
I met someone who has done them:
Yeah, that's right. I was at a United States Green Building Council meeting and a LEED (Leadership in Energy and Environmental Design) certified energy rater claimed to have lenders who he uses to put real estate deals together. They are private lenders who will offer similar features to what I've listed above. Private lenders getting involved in something progressive before big banking does? WOW! What a shock... (sarcasm)
To mortgage brokers and lenders:
Get involved! There is a large movement towards "Green" principles and products. The services that you could provide will help in working towards a more sustainable lifestyle.
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