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Energy-Efficient Mortgages

Does this sound like you or someone you know? You’re tapping out your resources to purchase an older home, you know your gas and electric bills are going to be through the roof, but you don’t have the money for energy upgrades.

There’s a solution, and it’s called an energy-efficient mortgage (EEM). With an EEM, your lender may be able to get you up to $8,000 specifically for improvements that will lower your energy bills. That’s money above and beyond the mortgage amount you qualified for, folded in to your regular monthly payments. It’s used to make improvements that will lower your bills by more than their costs raise your mortgage payment, as determined by a licensed professional called a HERS (Home Energy Rating System) Rater.

Here’s how the process works:

  1. You contract with a HERS Rater (you can find one at https://www.resnet.us/directory/search) who does a comprehensive audit of the home’s energy features and creates a software model of the home’s energy use.
  2. Based on that information, you and the Rater discuss recommended improvements. Typical items the EEM might cover include replacing an old furnace or installing a ductless heat pump if the home has electric baseboard or wall heaters, upgrading an old hot water heater, and adding attic insulation. (Don’t even think about using an EEM to replace windows! Contrary to popular opinion, they don’t have a major effect on your heating bills – it can take as much as 100 years to recoup the cost.)
  3. You get bids from contractors to perform the work, and decide who you’d like to use. Then the Rater incorporates the improvements, costs, and loan information into the software model and produces an Improvement Analysis Report, showing you and your lender which improvements are the most cost-effective.
  4. Your lender escrows the EEM funds at closing and releases them to pay for the work over the next 60 days. The Rater’s fee is usually included in the EEM as well.

EEMs aren’t new, and they can be included with Fannie Mae, Freddie Mac, FHA, and VA mortgages. Talk to your lender to see if an EEM can work for you!

How to Make Your Homes Solar-Ready

‘Solar-Ready’ or ‘Net-Zero-Ready’ are becoming buzzwords for homes that are pushing energy use down in anticipation of solar PV or thermal being added as budgets permit. Our friends at the EPA have developed resources to help miminize the cost of future installations, along with an acronym (they’re a govt. agency – of course there’s an acronym): EPA Renewable Energy Ready Home (RERH). Check ‘em out: solar electric guide PDF and checklist PDF , and solar thermal systems guide PDF and checklist PDF.

What’s in Your Green Building Library?

Here are my top three picks for every green homebuilder’s library. They’re all easy to read, practical, filled with useful info, and packed with jobsite photos and handy diagrams. You can buy all three for around $100 total.

Green from the Ground Up: A Builder’s Guide by David Johnston & Scott Gibson. A lively yet thorough overview by Colorado builder Johnston – I’d like to make it mandatory reading for my clients!

Residential Energy by John Krigger & Chris Dorsi. Simply the best – the appendices alone are worth the purchase price. They even include a copy on CD.

 The JLC Guide to Energy Efficiency just out from the Journal of Light Construction. Lots of real-life new and retrofit examples from JLC’s top contributors. Varied opinions, but brutally honest about what works and what doesn’t.

Close on the heels of these would be anything EEBA puts out. So what are your favorites? Comment or reply and let me know!

Don’t Just Build Green, Sell It! Here’s How

Check out Dean Homes’ Sustainable Building Practices web page: itt features one of their projects with rollover links to a description and photo of each sustainable feature. This interactive tool is the best consumer education I’ve seen yet on a builder’s website – nicely done, Dean!

Building green isn’t enough – you’ve got to sell it, and that means promoting and educating. To make promotion easy, ENERGY STAR offers a wealth of free marketing materials: logos, signage, doormats, you name it! Educating your buyers starts with educating your real estate agents. Pioneer Pacific emphasizes their energy-efficiency features in weekly agent meetings, including one featuring a talk by building science guru Mark LaLiberte. Mark asked the agents if anybody knew what the ‘e’ in ‘low-e windows’ stood for, not really expecting an answer. “Emissivity,” one of them immediately responded. (Yes, that is the right answer.)

I’ve shopped ENERGY STAR homes and heard site agents say it’s an ENERGY STAR Home because it has ENERGY STAR appliances. What are yours saying? (If you need help, I offer clock-hour classes on selling energy-efficient homes.)

Verified Homes Sell Faster and for 30% More!

MLS data for Seattle/King County has shown for years now that certified homes sell for a premium, but new data shows 3rd party verified ones do even better. Over the past two years, 3rd party verified homes in Seattle sold for an amazing 30.5% more – averaging $475K vs. $360K for non-certified homes. Despite the higher price, the 3rd party verified homes still sold in 10 percent less time. All of which prompts Ben Kaufman of Greenworks Realty (whose firm analyzes the Northwest Multiple Listing Service data every month in their e-cert reports) to ask, “Why aren’t more builders building and certifying 3rd party certified homes?” The smart ones are: roughly 30% of the new homes built in King County over the past year were certified to either Built Green, ENERGY STAR Homes, or LEED for Homes (although not all Built Green homes are 3rd party verified…yet).