Government's green home push can save you money

WASHINGTON — You're probably familiar with some of the federal government's 2009 incentives for home energy efficiency — heftier tax credits for solar panels, solar water heaters, geothermal heat pumps, heavy-duty insulation, windows, air conditioning and the like.

But these come-ons are just the beginning of an unprecedented, federal government push getting under way for energy conservation in housing — and even "locational efficiency" benefits.

At the Department of Housing and Urban Development, a new generation of energy-efficient mortgages is being rolled out, starting with FHA loans that offer 5 percent larger mortgage amounts to people who plan to undertake energy-efficiency improvements.

For example, if you qualify for a $300,000 FHA mortgage to purchase a standard house, under recent guidance to lenders FHA might now be able offer you $15,000 more upfront — a $315,000 loan amount — if the extra money is used to substantially lower the property's annual energy consumption.

HUD Secretary Shaun Donovan wants the FHA to offer additional incentives. One of the possibilities: Give applicants credit on their qualifying incomes for a home loan in exchange for documentable savings in annual energy expenditures.

Meanwhile, the U.S. House of Representatives has passed a massive energy-conservation and emissions-control bill.

Though the American Clean Energy and Security Act is better known for its more controversial "cap-and-trade" carbon-emissions program, the bill also contains an entire subsection devoted to creating incentives for consumers and federal agencies to build and finance more energy-efficient dwellings.

Among the key housing-related provisions in the bill:

• The FHA is directed to insure a minimum of 50,000 new energy-efficient mortgages during the coming three years. An energy-efficient house is defined as one in which energy consumption is reduced by 20 percent after renovations.

• Fannie Mae and Freddie Mac are directed to develop new mortgage products and more flexible underwriting guidelines to reward energy-conscious borrowers and builders.

The two companies — currently operating under federal conservatorship — also are required to help establish a secondary market for energy-efficient and location-efficient mortgages for moderate- and lower-income homebuyers.

The new generation of loans would increase the qualifying incomes of applicants by at least one dollar for every dollar of projected energy savings from renovations, green construction or efficient design.

Similar concessions on loan applicants' incomes would be extended for properties located in areas close to employment centers or near mass-transit lines. No concessions would be made on dwellings located in far-flung subdivisions that create long commutes and add to carbon emissions.

• Real-estate appraisers would be required to take energy improvements and the money they save into account as they value houses.

As a hypothetical example, if you spent $30,000 on a series of major upgrades, an appraiser would need to consider the annual cost savings in energy produced and the impact — if any — on market value. States would require licensed appraisers to undergo additional professional training to equip them for their new energy-efficiency valuation responsibilities.

• Federal financial regulators would be directed to support the establishment of privately run "green banking centers" in banks and credit unions across the country.

The centers, which presumably could be anything from unmanned kiosks to staffed offices, would help consumers understand how best to obtain financing for energy-conserving home improvements, second and primary mortgages, and energy audits and ratings.

HUD would also be authorized to conduct "renewable energy home product expos" to educate the public about the latest technologies and financing concepts.

• State governments would be required to ensure that homeowners whose energy technologies allowed them to get "off the grid" — no longer fully dependent on utility companies to provide them power — are not denied property-hazard coverage by insurance companies.

With this emphasis on home energy efficiency and reduction of real-estate-related emissions, are there signs buyers will take part?

Will they use energy-efficient mortgages or even pay more for houses that are highly efficient, loaded with the latest energy-saving technologies? The jury is out since a lot of this is prospective, and hasn't yet been signed into law.

But a Seattle real-estate firm, G2B Ventures, which is raising $50 million for an Efficient Real Estate Fund to buy up and rehab houses, says green-certified, high-energy conserving homes in the Seattle area sold for 7.5 percent more per square foot and 24 percent faster between 2007 and 2008.

So maybe there's going to be some extra green in green — better financing, higher property values, and faster selling times — more money in your wallet.

Kenneth R. Harney: kenharney@earthlink.net