Real Estate Blog - Finally Time For Lenders To Support Green Building?

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Finally Time For Lenders To Support Green Building?

There was an article last week in our local paper, the Mail Tribune, that talked about Earth Advantage and Countrywide Home Loans joining together to offer a reduced interest rate to their homeowners who wish to build their homes to Energy Star®, Earth Advantage® or L.E.E.D. standards, with their project being certified by an independent third party, Earth Advantage®. I've contacted my Countrywide Rep to verify the specifics of this agreement, and to see if they will be making this program available to us on their B2B side, but have not yet heard back from them. I'll update this article if I find out anything pertinent.

For now, the article says Countrywide will reduce their interest rate for qualifying borrowers building to these standards by 1/8%. At Quality Home Loans, Inc., we've been offering to reduce the borrowers' fee by 1/2%, so they may choose to apply the savings to their costs OR buy the interest rate down - their choice. This way, we may still shop their interest rate at all the lenders instead of being bound to one company's programs/ terms, and the homeowner may choose any loan program we offer to apply their savings to.

Jason McLennan, CEO of Cascadia Region Green Building Council, believes we need an all out approach. He strongly advocates building Living Buildings, both residential and commercial, that use rain catchment systems with on-site waste treatment systems, have net-zero energy use completely powered by solar energy, and contain only non-toxic construction materials.

Life is about choices. Which door will you choose?

We need to make an extra effort to support those homeowners choosing to build or purchase existing homes that meet these higher standards, as well as the Builders who are building them and the Architects that are designing them. Do you agree?

This Green Train is steaming along...All Aboard!!!!!!! Energy Efficient Green Movement

See you at the closing table!

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com

Karen Cooper - OR|CA Mortgage Consultant - www.Quality4Loans.com
Providing high Quality, Professional, Ethical service to Oregon and California home buyers and owners since 1983. Whether you are taking out your first home loan or your fiftieth, for your home, your second home or for investment, put my knowledge and expertise to work for you.

Posted by Karen Cooper-Mtg Banker|Broker Ashland|Medford on 04/02/2008 11:42 AM

Comments (8)

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8 Comments on Finally Time For Lenders To Support Green Building?

APR

2008

I think there are some lenders out there that have programs similar to this. Perhaps some of our mortgage gurus can enlighten us further on what types of incentives are available for home buyers. I am sure there will be many who want to jump on the green train!

Joan - Both FHA and VA have energy efficient mortgage options, allowing the verified energy savings to be used to offset debt-to-income ratios with up to $3,000-6,000 of the costs associated with the energy efficient improvements being added to the borrowers' loan. The cost to provide the verification required was very prohibitive. Fannie Mae had rolled out a conventional version of this to certain lenders, but it never was really picked up and used, and this program is no longer listed on their website. When I called Fannie Mae to see if it was still available, they told me it had been discontinued. Lots of room on that green train!

Thanks for stopping by.

They need incentive to pay more for the Green home it's great to want to help the environment but people need help in the pocketbook to move them in that direction.

Terry - That's what the interest rate/fee reduction is designed to help. Add the interest savings over the term of their loan with the energy savings, plus any available tax incentives and/or rebates available, and people are finding they are able to incorporate the energy efficient improvement costs in to their budgets. Sure, we have a ways to go, but I believe we're seeing some big steps in the right direction. Thanks for commenting.

APR

2008

Karen, Shouldn't the lender consider the cost savings of operating the Green Home in their ratios?

What do you know about on-site waste treatment systems?

Bill Roberts

APR

2008

this is good news. I like the picture with the 3 doors.

APR

2008

Hi Karen ~

Interesting. I had not yet heard about this. My husband and I are building now and we are looking into options for green building or grants available or anything like that! Very timely for us personally and for all Mortgage Pros professionally.

APR

2008

Bill - The original Energy Efficient Mortgages focused exactly on your point, how the energy savings an EEM borrower would have could allow for increased housing expense and a higher debt-to-income ratio being approved. I know that on-site waste treatment systems require close supervision of young household scientists who like to conduct experiments on system capacities. I had a Southern California client discover their septic troubles were directly related to a missing Hot Wheels collection.

Krista - Yes, it's nice to have a lender expanding their programs instead of contracting!

Sarah - Some of the programs that were attached to the 2008 Farm Bill may have contained incentives that would help you and your husband and your build. We'll have to see what actually makes it through one the Bill is approved.

Thank you all for commenting.

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