FHFA is seeking our advice now through March 17.
Please participate by submitting your comments!
GOAL: That disclosure of home energy costs (at time of sale or rent) be federally mandated.
The “Duty to Serve” rule is a new opportunity, A NEW WAY IN, an alternate route separate from the SAVE Act (still being considered in the senate) to accomplish energy cost transparency. It’s new but we have a short window of time to act – by March 17th.
Rocky Mountain Institute’s Residential Energy + workshop held Nov 2015 produced several focus groups including “Financing the Future”. This effort is our first goal; that disclosure of energy costs be federally mandated.
The “rule” offers opportunity to comment on related questions such as post-install savings verification and more. The specific goal of our group represents the collective voice of most home performance pros; energy cost disclosure.
FHFA’s “Duty to Serve” rule addresses underserved markets including 1- manufactured housing, 2- affordable housing preservation and 3- rural markets.
See the link to RMI’s doc for details on FHFA’s “Duty to Serve” rule and how you can submit comments by March 17.
Here are a few excerpts:
We have an unprecedented opportunity to provide technical expertise to FHFA. In its proposed Duty to Serve rule, FHFA recognizes that lowering energy costs can help make housing more affordable to renters and homebuyers. By incorporating energy performance into loan products and the mortgage-underwriting process, FHFA can make more capital available for home energy upgrades and energy-efficient homes, thus increasing comfort, health, and affordability of homes for families across the country.
Studies show that improved home energy performance can simultaneously reduce energy costs and improve access to more affordable, higher-quality building stock for very low-, low- and middle-income families. Further, high-performing homes can reduce loan default risks, thus improving stability in broader financial markets.
FHFA defines housing costs as rent plus operational costs, and recognizes that lowering energy and water use can reduce the total amount that tenants and homeowners spend on utility bills, thereby preserving affordable housing.
Very low-, low-, and middle-income families spend a disproportionate share of their income on energy costs. For instance, very low-income households spend 18 percent of their annual income on energy costs…
The most significant way the Enterprises can signal the importance of energy costs to lenders’ underwriting considerations is to require all operational costs to be included in the due diligence process… are an overlooked cash-flow risk.
Q3- Operating Cost Disclosure—Requiring operating cost disclosure during the mortgage underwriting process will benefit not only the target markets of the Duty to Serve, but the broader mortgage industry, while sending a signal along the real estate industry value chain that home performance is important.
Posted by Debra Little