Earlier this month, U.S. Senators Michael Bennet (D-CO) and Johnny Isakson (R-GA) re-introduced the Sensible Accounting to Value Energy (SAVE) Act, geared toward updating the underwriting process and appraisal guidelines for federal mortgages nationally. Originally introduced in 2011, the bill did not receive enough support to pass.
The SAVE Act instructs the Department of Housing and Urban Development to issue updated underwriting and appraisal guidelines for borrowers who submit a qualified energy report. Lawmakers hope that homeowners will install efficiency updates that will improve the value of their home while driving down their energy costs.
Research from The Institute of Marketing Transformation revealed that energy bills are one of the most substantial aspects of a homeowner’s housing expenses. It is estimated that the average homeowner spends roughly $2,500 on their yearly energy expenses, which typically exceed the cost of homeowners insurance and property taxes. Despite this fact, current mortgage underwriting processes do not take energy efficiency of homes into account while establishing a monthly mortgage rate.
One of the primary aims of the SAVE Act is to change underwriting guidelines so that a complete picture of housing expenses is taken into consideration while establishing a mortgage rate.
If passed, the SAVE Act could help increase demand for more energy efficient homes, which would result in more jobs for people in the home building, remodeling, and manufacturing sectors. It is estimated that 83,000 jobs will result from the bill, plus $1.1 billion in energy savings by 2020, according to a projection from The Institute of Marketing Transformation.
The bill already has a very broad support base: SAVE Act supporters include an array of real estate and building companies, businesses, and energy and public policy organizations, such as the National Association of Manufacturers and US Chamber of Commerce as well as the Natural Resources Defense Council and Alliance to Save Energy.
If you would like to find out more about the act, check out this SAVE Act Fact Sheet here.