Benefits and Liabilities of Energy-Efficient Homes in Encinitas

A recent study notes that having an energy-efficient home in Encinitas can have benefits and liabilites. Encinitas Realtor Linda Moore looks at this study concerning energy efficient homes.

In a study conducted by the University of South Carolina Center for Community Capital, which was funded by the Institute for Market Transformation, it was found that borrowers who have a green home that meets “Energy Star” guidelines were less likely to default on their loan by 32%.

By examining over 71,000 homes across the United States and accounting for several factors including the characteristics of the neighborhood and the size of the loan, the study identified the trend of defaulting less on home loans if those homeowners possess property that has Energy Star status.

These findings have led to the IMT urging that considerations be made for those that are underwriting mortgages on a home that is considered energy-efficient. The agency is also hoping that this may lead to changes in policy that could have lenders providing lower risk premiums, being more flexible on their credit profile, or higher debt-to-income ratio for homebuyers.

At the same time, improvements made to homes for energy-efficiency are often not recognized by lenders, appraisers, or even buyers, which can often lead to sellers looking to sell a home that meets Energy Star guidelines having a harder time getting a fair market price. Changes within the industry are now making it more effective to get fair market value on an Encinitas home with energy-efficiency with new guidelines being issued to appraisers, which is often utilized by major lending institutions such as Fannie Mae, Freddie Mac, and the Federal Housing Authority.

For more on this topic you can read the results of the energy efficiency study from IMT.

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