This article was originally published in the November/December 1999 issue of Home Energy Magazine. Some formatting inconsistencies may be evident in older archive content.
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Home Energy Magazine Online November/December 1999
More Money for Green HousesFinancing that dream green home may be getting easier. Fannie Mae, the nation's largest source of financing for home mortgages, is collaborating with the National Association of Home Builders (NAHB) Research Center to develop new mortgage products to support the growing green building industry. Fannie Mae's $100 million green mortgages investment pool is intended to promote the efficient use of resources in the design, construction, and operation of homes. Fannie Mae recognizes that owners of resource- and energy-efficient houses will reap energy savings, will have lower utility bills, and will therefore have greater monthly incomes than they would have if they had to pay larger utility bills. Fannie Mae plans to qualify borrowers for larger mortgages based on increased monthly incomes, provided that the houses they are buying are energy efficient at the time of purchase or that they plan to make cost-effective energy efficiency improvements immediately after they buy the house.
This green building initiative is being pilot tested in six cities: Atlanta, Columbus, Albuquerque, Denver, Los Angeles, and Seattle. These cities were chosen either because they already have green building programs or because local Fannie Mae partnership offices expressed strong interest in the initiative. The exact structure of the mortgage offerings and the exact definition of green housing will differ depending on the location. Various resource- and energy-efficient housing features may be more critical in one area than in another, depending on such factors as local climate, solar incidence, water resources, and energy costs.
Peter Yost of the NAHB Research Center is helping to define the draft criteria and acceptable methods for measuring a building's greenness. While not finalized yet, the criteria will be based in large part on the guide we wrote reviewing existing green building programs, says Yost. That guide is available on the Web at www.nahbrc.org. Home energy ratings are one means that will be used to assess the energy performance of a house. However, for new construction, sampling of like-built homes will probably be permitted in order to reduce the per home cost of an assessment--an option frowned upon by some raters, who worry about the potential liability for poorly performing homes that are approved by this sampling method. Builders are likely to meet the other green criteria through a prescriptive checklist. Builders or lenders who want more information on the green mortgage program can contact the local home builder's association, building industry association, or Fannie Mae partnership office.
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