Sen. Michael Bennet has joined a coalition of industry and environmental groups backing the
SAVE Act. The proposed legislation would improve mortgage lending and accelerate demand for energy efficient homes in Colorado and beyond.
Posted by Staff
The bill is likely to be introduced during this session of the U.S. Congress.
The SAVE (Sensible Accounting to Value Energy) Act seeks to remedy a risky blind spot in mortgage lending. The average homeowner spends more than $2,000 a year on energy— usually surpassing property tax or homeowner’s insurance. Yet mortgage underwriters don’t take energy costs into account, as they do taxes and insurance. The result: lending that is based on an incomplete picture of the costs of homeownership, and that fails to recognize the added value of energy efficient features.
The act has two components. First, it will instruct federal loan agencies (which currently guarantee more than 90% of all new loans) to account for expected energy costs in debt-to-income qualifying ratios.
Second, lenders will be able to adjust the valuation of an energy efficient home by adding the net present value (NPV) of expected energy savings to the home’s value. Under the SAVE Act, homebuyers will be able to purchase more efficient homes without increasing the cost of ownership.
The Institute for Market Transformation, a strong supporter of the Save Act, says Coloradoans have much to gain from it. So, it is not surprising that green homebuilders and contractors, real estate professionals, and environmental advocates around the state express support for SAVE. It has been endorsed by the Leading Builders of America, the Appraisal Institute, the U.S. Green Building Council, the Natural Resources Defense Council, and the Institute for Market Transformation, among many other groups.
For more information, visit www.imt.org/save-act.