What’s the color of your mortgage?
If you answered green, then you are one of a small but growing number of home buyers and owners who are taking their commitment to the environment to a whole new level.
Additionally, you are likely saving a few dollars over the long term, while also cutting down on building emissions, a critical front in the battle to curb climate change.
The concept of green loans and mortgages has been around for years, but these more environmentally-friendly financing options are now getting more attention as concern rises over planetary warming.
According to the Money Under 30 website, green lending has been around since the early 1990s, when federal housing officials launched the Energy Efficient Mortgage program.
Buyers, with help from federal EEM loans, are able to pick up additional financing when taking out a mortgage on a home to install more energy-efficient windows, put in better insulation, and change out old air ducts, among other improvements.
Fannie Mae and Freddie Mac, the Federal Housing Administration, and the Veterans Administration all offer various loan and mortgage products aimed at boosting the energy efficiency of homes, according to the International Association of Certified Home Inspectors.
The green mortgages and loans offered by the feds through banks credit unions, and other lenders are also geared towards buyers and owners dealing with homes in dire need of an energy efficiency revamp – just the type of older properties that Massachusetts, with its older housing stock, has no shortage of.
In fact, the worse off the home, the better off the buyer will be when it comes to getting a loan approved under the various federal energy-efficient mortgage programs.
Simply put, the loan has to make financial sense and save the buyer-turned-new-homeowner enough money over the long term to pay for the cost of a new automated thermostat or a solar-powered water heater, Money Under 30 notes.
And while bidding wars have cooled, some energy-efficient mortgages enable a buyer to offer more on a particular home based on the energy-efficient improvements they plan to make.
For home buyers who aspire to be long-term homeowners, the savings steadily accumulate over the years as they pay down their green mortgages and reap the benefits of lower heating and electric bills.
Want to track mortgage activity and see what the EEM trends are here in Massachusetts?
The Warren Group offers a range of real estate and lending data, including, NMLS Data and loan originator contact data. In fact, we recently hosted a webinar Exploring NMLS Data and LO Contact Data. Check it out.