Mortgage Underwriting Might Consider Energy-Efficient Home Improvements

Home energy efficiency is again on the table as the Senate deliberates on a bill relating to real estate sales. Congress is again considering this legislation that could assist both buyers and sellers in this steadily recovering market.

The legislation currently under consideration would encourage investment in energy-efficiency upgrades, which would increase the value of properties. But even more interestingly, it would also increase their affordability.

Borrowers are evaluated for their debt-to-income ratio, and home loans are created based on this as well as factors such as tax rates and insurance costs associated with the property. The proposed bill has morphed through several forms, but one of its most interesting features under consideration would be a mandate that energy efficiency factors be considered in the property valuation. This would have the net effect of increasing the home’s value, but also the average borrowers’ financial capability by increasing mortgage loan limits.

Not only would the mortgage be made more easily attainable, but the expenses associated with living in the home would be reduced by that property’s enhanced “green living” potential.

In support of this green trend in real estate, a recent study by the Center for Community Capital at the University of South Carolina indicates that homebuyers who borrow to purchase highly energy-efficient properties are statistically far less likely to default on those loans.

Serving Hermosa Beach and the surrounding South Bay Region, the reliable escrow professionals at Brighton Escrow stand ready to help in answering your questions and serving all of your real estate transaction needs.

Related Posts