Green Home Financing

Written by admin on August 25, 2011. Posted in Green Expert's Advice, Green Finance

How to Finance a Green Home

Making energy-efficient improvements to your home allows you to save money on your future utility bills while increasing the value of your home. Any qualified homeowner or prospective homebuyer can finance the cost of improving or purchasing an energy-efficient home by taking advantage of the Federal Housing Authority’s (FHA) energy mortgage program. Under this program, qualified homeowners and homebuyers can access financing for the purpose of incorporating green home energy technology into the design of their homes.

Evaluate which type of energy mortgage you will need. An energy-improvement mortgage allows a homeowner to finance green-energy efficiency improvements in her current home. An energy-efficient mortgage uses the energy savings from a new energy-efficient home to increase the home-buying power of the consumer and capitalizes the energy savings in the appraisal. Under an energy-efficient mortgage the prospective homebuyer would qualify to receive a more expensive home loan than she normally could afford, making it possible to purchase the more expensive but energy-efficient home.

Request a home energy rating for the home you want to finance with an energy mortgage. If you do not have a qualified energy consultant, visit the Residential Energy Services Network’s website to access its online directory of qualified home energy raters serving your area.

When most people think of building in a way that’s better for the environment, they think of a house that’s more expensive than the average home. Solar panels and better insulation make for higher costs during building, even though they pay off in the long term. But if you want a house that’s truly green, there are ways to build even more cheaply than you would if you were building a traditional house.

For a truly green home, consider using natural, local or recycled materials as the main ingredient in your building. Earth and straw are building materials that have been used in homes for thousands of years. They are cheap and readily available locally almost anywhere. If you use earth as your construction material, it should be composed of approximately 70 percent sand and 30 percent clay; most of the dirt in most parts of the world is appropriate for building. There are many different methods of constructing with earth. Cob is a simple, labor-intensive method of building with earth: simply mix the earth with straw and water and then take handfuls of the mixture and pile them on top of each other by hand to create your structure. Building with adobe is similar; you mix the earth with water and then form it into bricks which you can stack to create a building. Rammed earth uses the same mixture of clay and water, but instead of piling or stacking, you compress or tamp the earth into place. In modern buildings, rammed earth is made with machines. All earth buildings are very durable; if constructed properly, they can last for thousands of years. They can also easily be built to be highly energy efficient since earth has such a high thermal mass.

Straw bale is another cheap natural material that can form the basic construction material for a natural, green home. In this method, bales of straw form the bulk of the walls inside a standard wood frame. This creates excellent insulation and is quick and easy to construct. However, the straw needs to be plastered over to prevent moisture or pests from getting into it, and because this is a specialized skill, it can be expensive to have a straw bale house finished.

Green homes are the way of the future. With everyone worried about putting the environment in danger, the National Association of Home Builders and the International Code Council has developed the National Green Building Standards, which take into consideration the environmental issues and resource efficiency of each individual part of the building process. All facets of the construction, including the design, materials and operation of the home, focus on energy and water efficiency. More about Green Home in Florida

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Lenders and Appraisers are Catching Up with Green Homes

Written by admin on April 29, 2011. Posted in Green Finance, Green Homes

Catching Up with Green Homes

By Shannon Dauphin

Not long ago, the main question in the forefront of a homebuyer’s mind was, “How much house can I afford?” Today, the question is often, “How many energy-efficient home improvements can my pocketbook handle?” The need for green lending products and proper appraisals is the driving force behind a new market niche that caters to those who want to make their homes more energy-efficient.

Green home appraisals are hard to find

Many who improve their homes with energy-efficient products do so with high hopes of return, only to find that their appraisals are disappointingly low. The reason is inadequate appraiser training. Matt Grocoff, host of GreenovationTV and the owner of Michigan’s first net-zero energy home, has his own story about green appraisals gone bad.

“When we went to refinance after we had done much of the energy-efficient retrofit work, the appraiser came in with an old checklist. He checked that we had an air conditioner and heater, but the geo-thermal unit was what he was actually looking at,” Grocoff says. “Our house was appraised for well under the actual value of what it should have been, because the appraiser didn’t have the facts, nor the training. He didn’t even know what a geothermal unit was!”

This discouraging situation is happening more often as homeowners across the nation embrace green products for their homes. However, the problem is now being tackled with the development of standard guidelines for green appraisals. The Earth Advantage Institute offers a Certified Residential Green Appraiser course, and reaches out to brokers as well with the Sustainability Training for Accredited Real Estate Professionals (STAR) program.

Banks with green lending programs are ahead of the curve

Many lenders are now offering green home loan products for homeowners, and for good reason: the return on investment is a nice incentive. “For every dollar of energy savings that the home can gain, it would increase the value of the house by $20,” Grocoff says. “Therefore, if you were to save $1,000 per year, that would increase the value of your home by $20,000. Savings on energy costs will only go up in value.”

Programs that have been in place for some time, such as the Energy Star Mortgage, Energy Efficient FHA Loans, the FHA Rehab Loan, and the FHA Title One Rehab Loan are good options for more homeowners. Solar lease programs are also becoming popular for energy savings, but might not offer a tax credit.

Local lending opportunities can provide an even wider array of options. A good example is Energy Upgrade California, a program that includes substantial rebates–up to $3,500–for a whole-house retrofit.

“Private loans are getting more creative,” Grocoff points out. “Energy companies are partnering with banks to offer loans for green items like solar panels and geothermal units. The loans are helpful in ‘closing the gap’ between actually paying for the items and waiting for the tax credit, which doesn’t kick in until the following year.”

New green programs for homeowners are on the horizon

As more homeowners turn to energy-efficient home improvements, there becomes much more to consider than merely mortgage rates when deciding on ways to trim household costs. New green financing programs are popping up all over the country and working to catch up with the latest innovations.

State programs bolstered by the American Recovery and Reinvestment Act are available but vary from one state to another. One group drawing national attention is Michigan Saves, a program very active in green lending for home improvements, as well as pilot programs that are promising for homeowners and businesses alike. There are also the more traditional routes; individual lenders such as GE Money offer loans that can make green remodeling more affordable.

How can you find these innovative green loan products and trained, eco-friendly appraisers?

To find the best financing for your green projects, start with brokers, lenders and appraisers who are familiar with energy-efficient products. Work with a real estate agent who has experience with green homes; they might be able to refer you to a lender who offers green loan products. Look for a lender who advertises their familiarity with green properties and offers home remodeling options that focus on energy-efficient improvements. Turn to organizations like the Appraisal Institute to find qualified appraisers that can tell you what your home is really worth.

Keep in mind that many lenders, brokers and appraisers want to help you with your enertgy-efficient improvements, but simply may not have the tools or information available to understand the implications and advantages of green lending or remodeling. Don’t be surprised if you find yourself in the role of educator. To learn more about the many green home options available to homeowners, be sure to visit www.HSH.com.

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Value of green homes often lost on appraisers

Written by admin on April 17, 2011. Posted in Green Finance, Green Homes

Value of green homes

Green Home

Green is finally catching on in homebuilding. Practically every manufacturer, whether they make faucets or light fixtures, incorporates some shade of green into its designs. Even builders have gotten the message that buyers want environmentally sensitive, green homes and may be willing to pay for them.

Unfortunately, the lending community in general — and appraisers, specifically — remain far behind the times when it comes to green construction. Most lenders don’t offer mortgages that take into account the money buyers are likely to save on their utility bills, and most appraisers won’t give full value for the extra cost or the potential savings.

So-called energy-efficient mortgages have been around for years and have the backing of every federal housing agency. But don’t waste your time trying to find one, said Dave Porter, of Porterworks, a Stanwood, Wash., consulting firm focusing on sustainability.

Porter, who once worked for Countrywide Home Loans, said energy-efficient mortgages have not been viable because lenders, real estate agents and builders are not aware of them. Worse, he said, the general perception among those who do know about them is that the process is too cumbersome to make them worthwhile.

But even if you opt for a standard mortgage, builders complain that it’s difficult, if not impossible, to get appraisers to recognize green’s worth in their valuations. And, yes, lenders require appraisals on new as well as existing homes.
“Appraisers just don’t get it,” said William T. Nolan, a Florida consultant to homebuilders. “We can’t get them to appreciate the value of net costs. And if we can’t get the values recognized, (manufacturers) can’t justify moving these products forward.”

Appraisal Institute spokesman Ken Chitester said his group is taking a leadership role. It has produced several webinars and in June published a book on green valuation. But the institute held its first collections of courses on the topic recently, and builders complain that even otherwise top-notch professionals are woefully behind the curve.

Generally, it’s up to your builder or realty agent to insist that the lender-assigned appraiser is trained in green building. However, because many builders and agents still labor under the misapprehension that they can’t talk to the appraiser, let alone provide information, lest they be accused of trying to influence him, that job often falls to the borrower.

But make no mistake, said Porter, it is your legal right to be certain that the appraiser the bank is using is trained to put a value on your green home attributes.

“‘Competency’ should be a fighting word,” he contends. “You should expect the appraiser to have a competency in valuing green building. And you’re not pressuring anybody to make sure he does.”

Joseph Magdziarz, president of the Appraisal Institute, agrees. Not only does he suggest making sure that the appraiser is licensed, qualified and designated, Magdziarz also advises borrowers to accompany the appraiser during his inspection to point out energy-saving features that might otherwise be missed.

Ideally, the appraiser should be able to find houses that are comparable to yours, are nearby and have sold recently. Unfortunately, most multiple-listing services, the main source for “comparables,” don’t list green home features to any great degree.

“You can search by the color of the house,” Porter said, “but not by green features.”

But Sandra Adomatis, a nationally recognized green-valuation expert from Punta Gorda, Fla., said that when an multiple-listing service adds searchable data fields to encompass green listings, their attributes are often exaggerated.

In a recent MLS search, Adomatis, who wrote one of the Appraisal Institute’s two green courses, found four supposedly green houses.

“But none were,” she said. “One only had Energy Star appliances, one was a custom house, and the other two had no green features at all.”

Even when a listing is accurate, Porter said, the uniform residential appraisal form required to support the appraiser’s opinion hardly mentions green at all.

“It’s a joke,” he said, noting the single line that asks appraisers to list “additional features,” such as energy-efficient items.

So how do you get appraisers to recognize the value of a solar hot-water heater, extra insulation and high-efficiency windows, and that your place is going to use far less energy than it otherwise would?

One of Porter’s favorite tricks is to cite a 1999 article by economist Rick Nevin in the Appraisal Journal, published by the Appraisal Institute, that says $1 in annual energy savings is equal to $20 of value.

“The appraiser may argue the point,” Porter said. “But at least you are teeing it up and forcing him to deal with the issue.”

Another tactic is to insist that the appraiser take a cost approach to valuing the house as opposed to looking for nonexistent comparables. Comps are considered the holy grail of appraising. But, according to Marshall & Swift, a leading provider of building-cost manuals, the cost approach is a “highly effective way” to verify valuation and adjust estimates.

Meanwhile, Adomatis said builders bear some of the responsibility for obtaining better valuations.

“The question is, are builders charging more for green houses than code-built homes?” she said. “If they can’t sell them for more, we can’t appraise them for more.”

Set your green home apart

When it comes to valuations, green is like any other new feature, said Sandra Adomatis, a nationally recognized expert in green valuations. When enough homes include sustainable products, appraisers will adjust for them. Until then, here’s what the southwest Florida appraiser said you and your builder can supply to help the appraiser recognize a home’s worth:

A rating from a recognized agency that shows how your green home stacks up against the same model built to minimally acceptable construction standards in terms of energy efficiency.

A breakdown of the additional construction costs of green and energy-efficient items.

Blueprints and detailed building-product specifications of items that set your house apart from the rest.

A list of incentives, including tax breaks, to the builder for green construction or rebates to the buyer from the local power company, state or federal government or the manufacturers of green products.

A chart comparing green home features with those in code-built houses.

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New Reverse Mortgage Purchase Rule Makes It Easier to Buy a Green Home

Written by admin on February 23, 2011. Posted in Green Finance, Green Homes

By G. Kisselev

The Reverse Mortgage Purchase Home Program was created to make it possible for senior citizens to obtain a fresh, different residential home without be required to make regular monthly loan repayments as long as they’re providing reside in that actual house. The reverse mortgage purchase guidelines, which enables it feasible, had taken pattern by 01/01/2009. What the law states that Federal Housing Administration will start to insure reverse mortgage lending options to get used to obtain acquisitions. For the senior borrowers with the age of 62+ it means that these people may buy a house utilizing a reverse mortgage loan rather than the conventional mortgage. As a result 62+ seniors who desired to buy a different residence but don’t have favorable credit, a reliable source of income, or perhaps are not confident with starting out to make every month payments yet again at this period of live are now able to effortlessly do this, using currently efficient reverse mortgage purchase home loan program.

Conventional reverse home mortgages are made to enable senior citizens over sixty two to obtain a stable income using their own home equity. This allows an elderly man or woman who’s at ease with their existing residence to be able to stay in it whilst still gain access to continuous income.

On the other hand there are lots of golden-age citizens who’re unpleasant in their current house since it not necessarily fit their requirements anymore. All their choices are typically just constrained to finally residing in their home, or reselling it and next renting house or apartment somewhere else which usually most of the people think of more frustrating.

Using this innovative purchase home reverse mortgage loan approach retirees don’t need to cough out their extensive value for his or her different residence as well as do not have to bring repayments every month provided that they will live in the property. In order to be eligible the actual senior needs to be over sixty two along with owning a home at that time. There isn’t any income or credit score requirements need to meet the criteria. However they have to be in a position to take care of their new residence and also cover the cost of relevant taxes and insurance.

Therefore a senior citizen having a home yet needing another, according to this unique plan might obtain a purchase reverse home loan. In addition the Federal Housing Administration will insure this mortgage loan. The exact value of the original residence will be appraised together with the newest home to assess the amount of down payment required and rest of the money out of the sale made will be returned back to senior citizen.

The benefit of the program would be that the HUD will appraise the previous house by its real appraised valuation and never with the Federal Housing Administration’s common approach of utilizing the quick sales value. The quick sales valuation is a property’s value like it would have to be disposed off in a short time. This kind of valuation is normally substantial less than the actual value of the property. Using this method, senior citizens do not have to even put any down payment deposit for the brand-new house. Hence retirees purchasing a different home will love the advantage of the greater value of his or her previous house. This approach minimizes substantially and often entirely eradicates the necessity to come up with a down payment for that brand-new property. In addition, it simply leaves the senior with increased resources.

To benefit much more out of this program mature adults may want to downsize simply by relocating into an inferior house, or even less expensive neighborhood nearer to friends and family in order to get rid of the any additional down payment. They can get an extra profits coming from selling of the previous house for his or her individual usage.

The revolutionary program is getting more attractive when senior citizens consider that they wouldn’t have to make any mortgage loan monthly payments provided that they live and reside in their new house. A Purchase Home Reverse Mortgage started to be effective in 01/01/2009 and since that time the Federal Housing Administration did start to insure reverse mortgage purchase home loans.

This program isn’t brand-new, but If you’re a senior citizen, who seem to qualify for this amazing option and also dream to switch your property, now could be a good time to start researching for your new green home residence.

Guennadi Kisselev
Vice President Florida Green Homes Marketing,LLC
Licensed Real Estate Broker
Direct: (386)503-8537
built@mygreenhomeinflorida.com
http://www.MyGreenHomeinFlorida.com

Article Source: http://EzineArticles.com/?expert=G._Kisselev

G. Kisselev - EzineArticles Expert Author

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Green Mortgages

Written by admin on December 25, 2010. Posted in Green Finance

by Sandy Thomson

What are green home mortgages?

While there are many ecological reasons to build or remodel a home to be green, it is important to know that you can also get a green home mortgage in order to finance this.

A green mortgage is often known as an Energy Efficient Mortgage (EEM) and it credits the energy efficiency of a home in the home loan itself. With an EEM, a borrower can take advantage of lower interest rates and make energy-saving measures as a part of the single mortgage. Taking out a green mortgage for building your green home will also allow you to stretch your debt-to-income ratio and thereby you’re allowed to borrow more money.

Green mortgages aim to reduce the impact of the home on the environment. There are a number of lenders that are incorporating energy efficient terms into their mortgages in order to reduce the effect of global warming. The U.S. Department of Housing and Urban Development (HUD) is working in tandem with lenders so that consumers can buy energy saving homes or incorporate energy efficient features into their existing houses. The mortgage rates of green mortgages have been made affordable.

Qualifying for a green mortgage

In order to qualify for a green mortgage, your home needs to be rated by a Home Energy Rating System. The results are then documented in what is referred to as Home Energy Rating System Report. You will get a rating ranging from 1 to 100. Some of the factors that influence that rating include: home appliance efficiency, insulation, window efficiency, and general weather tightness.

If you get a high score, it indicates that your home is energy efficient and you may easily qualify for green a mortgage. If you get a low rating, it indicates that your home is not very energy efficient and needs improvement. In this case if you make the necessary changes to your existing home, you will not only save money on the cost of heating and cooling, but also a lender can approve your green mortgage.

Green mortgages give a boost to your buying potential and allow you to save more money. There are various kinds of energy efficient mortgages available with different mortgage rates. You will have to find one best suited for your situation.

For a more detailed description of exactly what steps are required to obtain a green home mortgage see mortgageloan.com’s a guide to energy efficient mortgages.

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