New Bill Seeks To Account Energy Costs In Mortgage Underwriting

New Bill Seeks To Account Energy Costs In Mortgage Underwriting U.S. Sens. Michael Bennet, D-Colo., and Johnny Isakson, R-Ga., have introduced a bipartisan bill that would enable better mortgage underwriting, encourage investments in energy-efficient home building and create more than 80,000 construction jobs.

Under the proposed Sensible Accounting to Value Energy (SAVE) Act, federal mortgage loan agencies would consider a homeowner's expected energy costs when determining the homeowner's ability to make monthly mortgage payments. According to the senators, the new legislation will allow lenders to account for expected energy costs along with other recurring payments in the debt-to-income qualifying ratios, which test the borrower's ability to afford regular monthly mortgage payments.

‘It is rare to have such diverse interests come together, and that's because this is a common sense bill,’ says Bennet. ‘The SAVE Act would help provide access to useful information about energy usage that home owners, buyers, appraisers and underwriters want and need. It would lead to more complete and accurate mortgage underwriting, would encourage investments in home energy improvements, create more than 80,000 jobs and lighten the load for Colorado families' budgets.’

‘As someone who has 30 years of experience in the resident real estate industry and who has lived through multiple recessions, I understand that recovery in the housing market and job creation in the construction sector is pivotal to getting our economy back on track,’ adds Isakson. ‘I place my support behind this bill because it has the potential to create jobs without any cost to taxpayers, and it will also improve mortgage underwriting in this country by including energy as a factor in the process.’

The senators cite a study from the American Council for an Energy-Efficient Economy, which stated that the SAVE Act could create 83,000 new jobs in construction, renovation and manufacturing by 2020. The senators also state the bill has the support of a number of real estate and building trade groups, including Leading Builders of America, the Appraisal Institute, the U.S. Green Building Council and the Green Builder Coalition.

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