Better Loans for Green Homes?

Under a proposed bill, people who buy new energy-efficient homes or retrofit existing homes could qualify for lower interest rates.
By: Anne C. Mulkern: REALTOR®Magazine
U.S. Rep. Ed Perlmutter (D-Colo.) has rolled out legislation that could result in lower-interest loans for people who purchase energy-efficient homes or retrofit existing residences with green features.

Under the bill, Fannie Mae and Freddie Mac would gain as much as a 25-percent credit toward their federal goal of serving low- and moderate-income buyers by repurchasing mortgages on environmentally friendly buildings.

This would create an incentive for lenders to pursue green lending because they would know they can easily resell the loans, said Perlmutter, adding that they could also pass the savings on to borrowers.

It's a promising idea, but it's not a sure thing yet. Home builders have expressed concern about the proposal because the additional requirements could increase construction costs; and Fannie Mae is worried about a requirement that would force it to have different percentages of "green mortgages" by various benchmark dates.