WASHINGTON – Nov. 2, 2011 – Rising utility bills can greatly affect a homebuyer’s ability to afford a house, sometimes even more so than property taxes or homeowner’s insurance. As such, a new bill introduced in the Senate is calling on lenders to start taking into account a home’s energy costs in standard mortgage underwriting – right along with principal, interest, taxes and homeowner’s insurance.
The bipartisan bill, SAVE Act (Sensible Accounting to Value Energy) would require the three major mortgage agencies – Fannie Mae, Freddie Mac, and the Federal Housing Administration – to factor energy costs into every loan they insure, guarantee or buy. To gather estimated costs of energy bills on a home, lenders would use data from previous utility bills or from an Energy Department survey database.
The bill also calls on the mortgage agencies to instruct appraisers to raise their property valuations when energy efficiency savings on a home can be shown. The higher value could then be used by a buyer to justify a higher loan amount if needed.