Buy a greener home, qualify for a better mortgage?

There are a handful of tax breaks for homeowners who improve the energy efficiency of their homes — essentially, the government reduces your taxes if you make your house greener.

Now a bill introduced in the Senate by senators Michael Bennet (D-Colo.) and Johnny Isakson (R-Ga.) would give a different kind of incentive — it would require lenders to take into account the energy-efficient features of a home when calculating a borrower’s income/expense ratio.

Essentially, it would allow buyers to qualify for a larger loan or a better rate if a home is energy efficient.

The idea is simple: When figuring what borrowers can afford to repay, banks assume they’ll have to spend a certain amount for heating, cooling, and other utility usage, based on what’s typical for the area and the type and size of home. The Bennet/Isakson bill would require them to assume that someone in a more energy-efficient home would spend less… and thus be able to afford to borrow more.

A home-energy report would have to be prepared by an approved inspector (much like a radon or termite report), and lenders would explain the benefits of investing in green upgrades.

Oh, and — unlike a similar bill that was introduced a few years ago — this one would not penalize less-efficient homes; it would only reward those with greener features.

Click here to read more in the Times.

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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2 Responses to Buy a greener home, qualify for a better mortgage?

  1. I think this law comes to simplify our life. Energy is very important and we should care much more. We moved in a house a couple of years ago and we try to be independent.We still have a lot to work, but we try our best.

    It’s a good news for us!

  2. Linda says:

    I see there is a global trend from many governments towards the incentivation of energy-efficient homes. Here where I am (Spain) the government has just passed a bill that forces all owners who want to sell or rent their home to get a certificate of energy efficiency. This certificate rates the efficiency of the house with a grade from A to G, and must be shared with the person buying or renting the house, so that he or she will get an idea of any additional costs that might derive from that.

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