Bipartisan Senate bill incorporates energy efficiency into home value, mortgage qualification

Sources: Alliance to Save Energy, Washington, D.C.

The bipartisan “Sensible Accounting to Value Energy” (SAVE) Act, co-sponsored by Sens. Michael Bennet (D-CO) and Johnny Isakson (R-GA), would include energy costs along with mortgage payments, property taxes, insurance and, where applicable, condo and homeowner association fees in the cost of homeownership. According to Kateri Callahan, president of Alliance to Save Energy, “This is appropriate, because energy costs are typically the second-highest cost of owning a home after the mortgage payment itself. However, a new home that is 30 percent more efficient than an average house will save the homeowner about $20,000 over the life of a 30-year mortgage.”

“Under the SAVE Act, the present value of the energy savings—as much as $10,000 in the above example—would be added to the home’s value in determining the mortgage cap. While the price of the house will be a little higher, to cover the builder’s up-front costs, the homeowner will save more in utility bills. Both come out ahead,” states Callahan.

Another supporter of the SAVE Act is Mike Collignon, Green Builder Coalition executive director. Collignon believes that the Act “has the potential to change the paradigm for home construction and renovation in the United States” for home buyers, underwriters, Main Street businesses/energy consumers, utilities and power grids, the nation, and home builders, “who won’t lose the added cost of efficiency at the closing table.”