Senators Michael Bennet (D-CO) and Johnny Isakson (R-GA) reintroduced the SAVE Act earlier this month. The bill gained support from the National Association of Realtors and National Association of Home Builders, who helped to shape this revised bill.
The SAVE Act would improve federal mortgage underwriting by including a home’s expected energy cost savings when determining the value and affordability of energy efficient homes. Utility bills are usually larger than either real estate taxes or homeowners insurance, but they are currently ignored in mortgage underwriting. Better information about a home’s expected energy cost savings will enable better mortgage underwriting, provide affordable financing for home energy improvements, reduce utility bills for homeowners and spark job creation in the housing industry.
The SAVE Act instructs the Department of Housing and Urban Development (HUD) to issue updated underwriting and appraisal guidelines for borrowers who submit a qualified home energy report. The bill would cover any loan issued, insured, purchased, or securitized by FHA and other federal mortgage loan insurance agencies or their successors. These agencies collectively guarantee more than 90 percent of all new loans.