Fannie Mae, HUD, and the Veteran's Administration all came forward with various pilot programs in the 1990's to assist homeowners interested in "Going Green". One of the largest stumbling blocks for homeowners has been the maximum dollar amount these secondary marketing sources will allow to be allocated to energy efficiency improvements. The small amount that is allowed to be added to the loan for this purpose added to the stiff documentation requirements to prove the actual energy cost savings these improvements will generate have made the current version of Energy Efficient Mortgages useless to the homeowners that are looking for them.  For example, the cost of the energy-efficient improvements that may be eligible for financing into an FHA Energy Efficient Mortgage is the greater of 5 percent of the property's value (not to exceed $8,000), or $4,000. This doesn't cover minimal solar panels, much less a Net Zero Home!

Seeing the percentage of homeowner requests for truly sustainable materials and energy efficient features in homes they are requesting be built, as well as the interest expressed by potential homeowners in subdivision tract homes, the National Association of Home Builders has been working hard to have legislation put before Congress that will improve energy efficiency and sustainability in housing without driving costs above reasonable levels.

The House Financial Services Committee is reviewing H.R. 6078, the Green Resources for Energy Efficient Neighborhood Act (or the GREEN Act) of 2008. The GREEN Act, sponsored by Rep. Ed Perlmutter, (D-CO) provides incentives to lenders to provide lower interest loans and other benefits to consumers who build, buy, or remodel their homes and businesses in order to improve energy efficiency. Rep Perlmutter said to the committee that his bill's goal is to create a market for energy efficient and location efficient mortgages by making these Government Sponsored Enterprises, FHA and HUD eager to collect them, while requiring Fannie Mae and Freddie Mac to finance energy efficient and location efficient mortgages on buildings located near mass transit. This would be accomplished by amending the charters for Fannie and Freddie to buy, sell, service and otherwise deal in energy and location efficient mortgages, and require the FHA to insure $1 billion worth of energy efficient homes.

Hopefully this time around, viable options will become available to eco-friendly homeowners wishing to do the right thing. I know, here in the Rogue Valley in beautiful Southern Oregon, several groups are on board this green train. Let's continue to support them, and get the consumer the mortgage products they need!

See you at the closing table!

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

http://localism.com/article/451016/Finally-Time-For-Lenders-To-Support

http://localism.com/article/358465/Green-Building-Concepts-Taking-Hold-in

http://localism.com/article/294253/Utility-Independent-AND-Affordable-Housing-in

http://localism.com/article/267623/Oregon-Setting-Pace-at-Greenbuild-7

http://localism.com/article/231419/There-s-A-New-Green-Player