Look What Is Cooking in the Lending Business!
 
Utility Bills May WILL Soon Become Part of the Loan Approval Process for Home Buyers! 
 
A great local successful investor, Eric George, is an expert in making homes energy efficient, forwarded this article to me yesterday. Eric shared this very interesting article because the wheels are in motion where the Energy Costs of a Home will be factored into underwriting and the loan approval process.
 
In today’s world, home heating, cooling, and energy costs are a huge part of a family budget. It is apparent, the lending institutions have done their homework and discovered energy efficient homes have a 32% lower default rate.
 
Having this information NOW, can help forecast your future business. By getting this heads up right now, you will be in a much better position as an investor.
  • What will happen to the market values of homes with high utility bills?
  • Will you have a different vision for your rehabs in the future?
  • What about selling your rentals to your tenants or others?
I am not an energy expert and odds are, you are not either.
Unlike Eric, we can only think about the simple things like replacement windows and insulation; but, there is a lot more to it.
 
Question: If I can get Eric to do it, would you be interested in attending a free webinar featuring Eric on these energy efficient home techniques?
 
If so, please click this email and write “Yes, I want a webinar with Eric”
here is the email “News@MikeButler.com
.
Here is the article Eric sent me yesterday
 
 


 
RESNET Calls for Reforms of Housing Market and Mortgage Financing
 
 
RESNET (Residential Energy Services Network) has released a policy proposal that calls for the labeling of a home’s energy performance and More…including the monthly energy savings when calculating home ownership costs in mortgage financing. The intent is to bring transparency to the housing market and introduce greater rationality into mortgage financing.
 
Car and home appliance manufacturers have long been providing consumers with information about the energy efficiency of their products through MPG (miles-per-gallon) stickers and Energy Guide labels. As a result, consumers are able to make better-informed buying decisions.
 
This, however, is not the case for homebuyers who for the most part are not aware of the energy performance of homes they are considering buying.
Making HERS Index scores a requirement for homes financed through federal mortgage programs like Fannie Mae, Freddie Mac, FHA and VA, would be a start in the right direction to addressing this problem.
 
Current federal mortgage underwriting practices fail to take energy savings into consideration when determining the value and affordability of energy efficient homes. However, a recent study showed that energy efficient homes have a 32% less mortgage default rate. Therefore, RESNET proposes the adoption of a new formula to calculate how to determine housing affordability – one that would account for energy savings:
 
Principal 
+ Interest 
+ Taxes 
+ Insurance 
– Monthly Energy Savings (PITI-ES)  
= TOTAL COST
 
The new formula would provide greater accuracy in determining housing affordability, and could make energy efficient  homes more accessible to consumers than they are now.
 
The combination of labeling of a home’s energy performance in federal backed mortgages and the new way of calculating housing affordability in the mortgage loan will help homebuyers better understand the true cost of owning a home and allow energy upgrades to be financed in the mortgage loan.
 
To download the new policy initiative click on RESNET Call for Reform
 
Residential Energy Services Network

Special Thanks to Eric for this very important update of upcoming trends affecting our real estate market.
 
P.S   There’s only 15 Cabins left for the Great Investor Cruise Jan 12-19, 2014 on board the FREEDOM of the SEAS, RCCL. Give Ty a call to reserve your cabin now!

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