At the National Association of Home Builders Green Building Conference in Raleigh NC last week there was a confirmation that “Sustainable” building is selling faster than “traditional” building! So that’s GREAT NEWS!
The BAD NEWS was that appraisals are not reflecting the “value” and some of the technical items used to make the homes “green” are too complicated for consumers to really understand!
Unfortunately, the prospect of sharp reductions in monthly utility bills has not gained much attention from the lending community, and mortgages recognizing those savings remain mostly an idea whose potential has been largely unrealized.
Another ongoing challenge is that the concept of green housing is not well understood by the general public, conference panelists said, and a significant share of prospective buyers are actually turned off by it. Green builders were advised to market the specific benefits of their homes rather than selling green, and to avoid providing too much technical information, which can quickly go over the heads of buyers and discourage sales.
It’s not clear when the Obama Administration will tackle how to create a “GREAT” Energy Efficient Mortgage… but clearly we don’t have one at this time!
“Green homes face a red light,” said Dave Porter, CAPS, CGA, CGP, CMP, MIRM, of PorterWorks. “Appraisers don’t understand costs and buyers can’t get the full financing they need.”
In a show of hands from the audience at Porter’s breakout session on the latest in appraising and lending on green building, only a few said that one of their customers had ever been offered an energy efficient mortgage (EEM) or energy improvement mortgage (EIM) or that an appraiser had solicited information on the energy features of one of their homes.
Citing Fannie Mae guidelines advising lenders not to assume that an appraiser is competent, Porter told builders, “You have every right to say I want a competent appraiser. You do not need to roll over on this. If they have not seen or appraised a green home, ask for an appraiser who has appraised one of these homes or has knowledge in energy efficiency.”
For more information from the NAHB – click here.
Personally – I think we are several years away from having a meaningful EEM program available… #justsayin’ – they have to be able to appraise (before Fannie and Freddie will create a real program), which means statistics will need to show that they ARE selling. Right now, most MLS services don’t even have historical data or fields to indicate that a home is even Energy Star Efficient! There are TOO MANY certifications!
I try and answer all questions :)