According to a recent article in the Washington Post, “energy conserving homes may soon get rewards from a major mortgage insurer”.

Energy efficient and green building is certainly the wave of the future if not already in place. New subdivisions are going green in the hopes of drawing new home buyers to the market. But now lenders are realizing the net savings that energy improvements provide to homeowners can be taken into account when they underwrite and set fees for mortgages. Appraisers may also recognize the added value.

Those that have an energy-efficient home or green building construction typically pay less in utility bills than those without energy efficient homes. Lenders figure they can factor in these out-of-pocket savings into calculations of household debt to income ratio. Since the debt-to-income ratio is dropping to 43% instead of 50%, January 1, this can certainly make a big impact on those applying for new home loans and refinances. This may allow larger mortgage amounts for energy-efficient homes and help qualify more first time home buyers.

Surprisingly enough this is commonplace in many other countries but still a work in progress in the US. The Sensible Accounting to Value Energy Act (SAVE) would require Fannie Mae, Freddie Mac, and FHA players to revise their rules to better recognize and reward energy savings. Over 125 local MLS services across the country are already helping out buyers by including “Green fields” in their listing information. They allow sellers and their agents to describe improvements specifically designated to green or energy-efficient building. This would include high performance windows and doors, heavy-duty insulation, Energy Star appliances and any solar or geothermal features.

Thousands of appraisers and lenders are undergoing green evaluation training and new addendum such as the green addendum can be used to translate energy conservation improvements into higher property valuations.

In addition to these rewards, Genworth Mortgage Insurance,  major American private mortgage insurance company, also plans to jump on board into green landing. This facility already rewards Canadian homebuyers and homeowners by offering a 10% “energy efficient refund” of their mortgage insurance premiums and a break on debt to income ratio calculations when applying for new loans or refinancing.

Is Green building important to you? If you could save money a variety of ways including in your fees and points on a mortgage and mortgage insurance would it be worth it to you to find a type of home capable of maintaining these standards?