Bipartisan Amendment Based on SAVE Act
Washington, D.C. - The Senate today adopted an amendment introduced by U.S. Senators Michael Bennet (D-CO) and Johnny Isakson (R-GA) to establish more practical mortgage lending processes on a voluntary basis, encourage investments in energy-efficient homebuilding, and help create tens of thousands of construction jobs. The amendment is based on the bipartisan Sensible Accounting to Value Energy (SAVE) Act that they've previously introduced.
"Energy expenses can be among the highest costs associated with homeownership. The mortgage underwriting process should account for efforts to improve a home's energy efficiency," Bennet said. "This measure ensures that borrowers with FHA-backed loans will be able to account for the energy savings they'll realize when determining the size of their home loan. It encourages builders and homeowners alike to construct energy-efficient homes, which will help create thousands of jobs along the way."
"The SAVE Act has no cost to taxpayers and will improve mortgage financing by including qualified energy efficiency cost savings as a factor," said Isakson. "This is a commonsense way to grow private-sector jobs and increase energy efficiency in our country, without resorting to federal government mandates or new spending programs."
"The SAVE Act is essential to encourage homeowners to actually make the commitment to buy an energy-efficient home and get their investment back," said Gene Myers, CEO of Thrive Home Builders in Denver. "Until our customers can qualify for homes and receive the benefits of appraisals that reflect the true value of what they are buying, businesses like ours will be unable to really become the mainstream of housing in Colorado or anywhere across the country."
The SAVE Act would help establish more practical mortgage lending processes by allowing federal mortgage loan agencies to consider a home's energy efficiency and expected monthly energy bills when determining the homeowner's ability to afford monthly mortgage payments. On average, homeowners spend about $2,500 a year on home energy costs, and that adds up to more than $70,000 over the life of a 30-year mortgage. But, while mortgage lenders typically take into account the cost of real estate taxes and homeowner's insurance when determining the cost of a home loan, they do not take into account home energy costs, even though these costs are often more than taxes and insurance. The SAVE Act would address this issue by encouraging investments in energy-efficient homes and facilitating the creation of tens of thousands of construction jobs in the process.