Green Mortgages
If you are like most people, you probably have either not heard the term "Green Mortgage", or are
vaguely aware that these loans exist, but are not exactly sure what is available. As part of my
research in helping to expand the "Green Building" section of modularresource.com, I have spent
hours researching the programs available and the mortgage lenders that focus on these programs
and help consumers capitalize on their benefits. This article will highlight some observations from
my ongoing research, as well as some resources that I have found that can save you money.
First off, I'd like to give a quick definition of the term "Green Mortgage". Although there is no standard
definition that I know of, here is my explanation: When referring to new construction, a Green
Mortgage is a loan that encourages, through incentives, the use of all available technology and
resources to insure that a new home has the least possible negative impact on the environment.
This type of loan benefits the borrower because as an inhabitants of the planet, we all benefit from
the efforts of builders who use every method available to reduce the impact of new construction on
the environment. But how does it save the borrower money?
The basic money-saving concept behind the green mortgage (also called Energy-Efficient
Mortgage,or EEM) is that by working with the builder to ensure that all available cost-effective
methods of construction are used the borrower is able to save money through reduced energy costs
and incentives and rebates available through government agencies and power companies. Energy
conscious mortgage lenders can also provide incentives to make this type of loan more attractive as
well. Although the upfront costs of some of the energy-saving methods is sometimes higher than
older, less green building technology, the borrower is able to qualify for a larger loan if certain
standards are met. Generally, the savings in energy can offset the higher mortgage payment
immediately on a month to month basis. In addition, an energy-efficient house will obviously have
more value in the future, giving the borrower more equity and a higher resale value should they
decide to move.
So now that you have an idea about what a green mortgage is, I'd like to tell you some of my findings
from the research I did. First, as someone who considers myself a highly skilled internet researcher,
I was somewhat disappointed with the information I found on the subject of green mortgages. My
objective was to find local lenders from each state and list them on the website so people who are
interested in this type of loan could easily find a lender in their state (similar to the way modular
builders, log home builders, and land is listed on the site). While I found that there are many lenders
who are Energy Star partners and members of local and national Green organizations throughout the
U.S., there are surprisingly few companies that highlight or even mention the availability of the
different Energy-Efficient Mortgages available. I'm guessing that one of the reasons for this is that
there is some extra work involved for all of the parties involved in a Green Mortgage. In order to
qualify for rebates and incentives it is necessary to have the new home inspected by a third-party in
order to determine that all the necessary requirements are met. This results in an extra monetary
cost as well as time and paperwork for the borrower, lender and builder. Unless the lending source
is committed to the cause of providing energy-efficient housing, they may find it easier to point the
borrower to simpler loans that don't necessary have all the benefits of a Green Mortgage in order to
make the transaction easier.
The good news is that in my research I did find one lending institution in particular that does an
unbelievable job of promoting energy-efficient mortgages by educating borrowers on environmental
issues. In addition to providing valuable resources to the borrower, they actually offer a rating point
system that awards points to the home buyer for energy saving methods applied in the building of the
home and credits the buyer with $1 per point earned against closing costs. The company is a
mortgage broker called MortgageGreen, Inc.- web address www.mortgagegreen.com. (at this point I
would like to say that I am in no way affiliated with MortgageGreen, Inc. and am not compensated by
the company in any way. I simply found the website and was so impressed with the information they
provide to consumers on the internet that I felt I should pass it along. I have no experience obtaining
a loan through this company, so as always, the due diligence required when looking for a mortgage
broker or lender is still advised).
Some other benefits include offerings from MortgageGreen include free carbon-offset credits and
even free tree-planting. From the hours of research I have done, and the research I continue to do,
MortgageGreen has the most ambitious and helpful online presence that I have seen on the subject
of Green lending initiative. This is definitely the first website I would visit if I were looking into Green
Mortgage options.
MortgageGreen is a California based company and many of their resources target California home
buyers but they provide loans nationwide. As I mentioned before, there are very few lenders or
brokers that are actively promoting green mortgages on their websites but I will continue to search for
other companies that make these types of loans easier for the consumer. Another mortgage broker
that appears to be ahead of the curve is Indigo Financial Group - website www.energystarloans.com
Indigo Financial Group can help consumer looking for a new construction loan by allowing buyers to
qualify for larger loans that enable them to invest in the latest technology in building which will save
them thousands of dollars in energy costs in the coming years. Indigo Financial Group is based in
the midwest and are licensed in Florida, Illinois, Indiana and Michigan as a mortgage lender.