Loan Modification

FHA to Guaranty 50,000 Energy-Efficient Mortgages

By Gina Pogol

The U.S. House of Representatives’ Financial Services Committee, perhaps in celebration of Earth Day, approved legislation to promote green building by granting incentives to mortgage lenders. The goal is to fund 50,000 FHA green mortgages by the end of 2012. The bill, if passed by Congress, is expected to generate 140,000 new building jobs.

It obliges HUD to back mortgages made by approved lenders to fund renewable energy systems for residences. It also directs HUD to undertake a 50,000-unit demonstration over four years to show lenders that funding projects energy-efficient projects can be profitable.

In addition, the GREEN Act encourages FHA to insure at least 50,000 energy-efficient mortgages by Dec. 31, 2012, in order to stimulate demand for such homes and get home builders, homeowners, and lenders on board.

What kind of projects will you be able to finance? If passed, H.R. 2336 will award grants for energy-efficient retrofits (you don’t need to buy / build a brand new house to take advantage of the program); channel resources through community groups (check for groups in your state on HUD’s Web site) to extend the availability of energy-efficient products for existing homes; and create partnerships to promote sustainable site planning, building orientation, and landscape architecture.

Jobs and financing — the latest additions to the Green Resources for Energy Efficient Neighborhoods Act of 2009 (GREEN Act) combine stimulus with lending, hopefully releasing money to homeowners and providing badly-needed construction jobs as well.

Full post as published by FHA Mortgage Guide on May 03, 2010 (boomark / email).