Common-sense legislation would strengthen federal mortgage underwriting, help finance energy-efficient homes, and create jobs
Washington, DC – June 6, 2013 – As homebuyer interest in energy efficiency strengthens, the Sensible Accounting to Value Energy (SAVE) Act [S. 1106], reintroduced today by Senators Michael Bennet (D-Colo.) and Johnny Isakson (R-Ga.), would improve access to mortgage financing for energy efficiency. The bipartisan bill would provide lenders and homeowners with more flexible federal mortgage underwriting rules that would include a home’s expected energy cost savings when determining the value and affordability of the home.
On average, homeowner utility bills are larger than either real estate taxes or homeowners insurance, yet they are currently ignored in federal mortgage underwriting rules. This makes it difficult for middle-class homeowners to finance the upfront cost of efficiency improvements, even though the improvements will more than pay for themselves.
“This is an important step by Senators Isakson and Bennet,” said IMT Executive Director Cliff Majersik. “A recent study of more than 70,000 mortgages found that mortgages on energy-efficient homes were 32 percent less likely to be in default. The study provides strong evidence that the SAVE Act is good credit policy and would help protect lenders and taxpayers from the risk of mortgage default. The SAVE Act is an important complement to other lending reforms made in the aftermath of the mortgage crisis.”
American consumers increasingly demand energy-efficient homes. A recent survey by the National Association of Home Builders found that 91 percent of homebuyers said an energy-efficient home is desirable or essential.
“The SAVE Act is a win for consumers and manufacturers,” said Ross E. Eisenberg, vice president of energy and resources policy at the National Association of Manufacturers. “This legislation will drive the use and development of energy efficient products for homeowners, directly resulting in the creation of jobs for the manufacturers of these innovative technologies.”
With no tax increase, fees, or mandate, the SAVE Act would remove the barriers to finance and increase the supply of energy-efficient homes and renovations, thus creating vitally needed jobs in the construction, remodeling, and manufacturing sectors. An analysis by the American Council for an Energy-Efficient Economy and IMT found that the SAVE Act would add 83,000 net new jobs, largely in the construction, remodeling, and manufacturing sectors.
The bill brings together a broad and diverse coalition of supporters including the National Association of Realtors, the National Association of Manufacturers, the U.S. Chamber of Commerce, the National Association of Home Builders, the Natural Resources Defense Council, the Alliance to Save Energy, the Appraisal Institute, the Consumer Federation of America, and the Center for American Progress.
To learn more about the bill and its supporters, visit www.imt.org/SAVE-Act.
ABOUT IMT: The Institute for Market Transformation (IMT) is a Washington, DC-based nonprofit organization dedicated to promoting energy efficiency, green building, and environmental protection in the United States and abroad. Much of IMT’s work addresses market failures that inhibit investment in energy efficiency. For more information, visit imt.org.