The SAVE Act: Qualify for Larger Loan or Better Rate with Energy Efficient Home

Most of you already know that homeowners can get a tax break when making their homes more energy efficient, but did you know that the possibility exists for you to qualify for a larger loan or a better interest rate if the home you’re purchasing is deemed energy efficient? A bill has been introduced to allow for such a situation as this, essentially taking into consideration the fact that your utility bills would be much lower, and thus, you’d be able to afford more.

The bill, also called The SAVE Act — Sensible Accounting to Value Energy — was introduced originally by Senators Johnny Isakson (R-Georgia) and Michael Bennett (D-Colorado), and initially “shot down” because of some penalties against older and less efficient homes. However, this portion of the bill has since been removed and it was re-introduced in June to Congress. According to NY Times:

The government already promotes so-called energy-efficient mortgages under a Department of Housing and Urban Development program. But the proposed legislation would require lenders to take the projected energy savings into account when presented with a qualified energy report. The senators originally introduced the bill in 2011, and although it attracted support from groups across a broad political spectrum — including the United States Chamber of Commerce and the Center for American Progress — it failed to gain approval. The sponsors have broadened its appeal within the real estate industry, chiefly by eliminating provisions that could have penalized older, less efficient homes or those lacking a report based on estimated energy consumption.

To get this type of loan, an approved inspector would have to prepare a home-energy report for the lender, explaining the benefits of investing in the “green” upgrades for the particular home.

Remember, we are not mortgage and loan experts! If you’d like to find out more about this or any other type of loan, please contact us and we can put you in touch with some excellent lenders in the Harrisonburg area.

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