Financing Energy Efficiency Through Mortgage Loans
For decades, mortgage loans have been the primary means of financing residential and commercial building ownership.The lending community’s use of traditional, multi-year loans for both commercial and multifamily properties alike spread costs over a long period to lessen financial burden for buyers, but until recently, building owners who sought a more energy-efficient building needed to obtain non-traditional financing and perform energy retrofits separate from a traditional mortgage.
The following market analysis examines the current landscape for building owners and lenders seeking to integrate energy efficiency and utility savings into building assessments and retrofit plans, and to utilize the data to enhance traditional loans. The analysis was performed by the Institute for Market Transformation (IMT) and Lawrence Berkeley National Laboratory (LBNL), with funding from the U.S. Department of Energy (DOE).
In it, we examine real properties that successfully utilize existing programs to help building owners account for energy efficiency during mortgage underwriting, and offers guidelines for the mortgage lending community and building owners on how to roll energy efficiency retrofits into traditional mortgages in an effective and seamless manner.