Lenders pass 'green' savings on to buyers of newly-built homes

March 6, 1:53 PMHousing ExaminerDena Kouremetis

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Offer them a lower rate and they will come.

This may be the mantra of those who figured out a while back that if you incentivize homebuilders to build greener homes by offering their buyers lower interest rates for homes that reduce resource use and related operating costs, buyers will beat a path to your door.

In his BUILDER Magazine article, Signs of Change; Do homeownership credits for solar energy signal the start of green mortgage lending?, Rich Binsaca  examines “green” mortgages, but points out that the industry is getting better at identifying green building practices.

Binsaca points out that Wells Fargo Home Mortgage offers a new-construction solar home program that allows builders in California to transfer a rebate offered by the California Energy Commission’s New Solar Home Partnership directly to buyers at closing, which they can use for the down payment or as a permanent interest-rate buy-down to lower their monthly mortgage payments. “The offer applies to conforming and non-conforming loans for new single-family homes, including condominiums, that will be used as the buyer’s primary residence,” reports Binsaca. “The rebate amount depends on the size of the solar system installed.”

He also identifies Mortgagegreen, a real estate finance company in Larkspur, CA that now offers “first national green residential mortgage underwriting standard” for rating and funding sustainable construction.  The program is available nationwide and its new standard includes a rating system.

NAHB’s Bill Renner is quoted as saying that caution is the word for a while.  And that without the support or input of national underwriters or a consensus on how to put a value on green building, it’s going to be difficult for other lenders and banks to support this program, according to the article.  Renner has been tracking both green mortgages, formerly known as “energy-efficient mortgages” since the late 1970s.