Zillow tells us that American homes have a median age of 51 years. The words “energy efficiency homes” were not in our lexicon 51 years ago.
Dedicated to changing that energy inefficiency in homes, Freddie Mae recently launched GreenCHOICE mortgages as part of its Duty to Serve Place initiative. This Duty to Serve Place Initiative focuses on supporting underserved markets by financing more rural and manufactured housing and by preserving more affordable housing for homebuyers and renters nationwide.
GreenCHOICE mortgages help to provide financing for home improvements dedicated to greater energy efficiency.
Mike Dawson, Freddie Mac’s vice president of single-family affordable lending strategy and policy, said, “Older homes tend to be more energy inefficient which may raise the cost of homeownership and make it more difficult for homeowners to maintain (their older houses.) GreenCHOICE mortgages are part of a multiyear initiative to facilitate energy-saving improvements that could help families better sustain homeownership.”
Energy efficiency costs, estimated at approximately $2,200/year by the US Department of Energy, are not typically factored into traditional mortgage underwriting methods. GreenCHOICE will enable Freddie Mac to assess loan performances between homes with and without energy enhancements. It will also help Freddie to develop underwriting guidelines to account for energy efficient features, design valuation guidelines, and to develop uniform data collection pertaining to energy efficiency in older homes.
Freddie Mac is partnering with energy experts such as the Rocky Mountain Institute, RESNET, the Institute for Market Transformation and the Department of Energy. These experts will help Freddie seek solutions and underwriting requirements for GreenCHOICE mortgages that best serve green product offerings for older homes that come into the homeownership marketplace.
Agents, help your clients and mortgage lenders become aware of GreenCHOICE mortgages and the value they bring to housing communities nation-wide.