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Any effective marketing strategy will define the value of your services
to your customers. By considering the value of your rating services to
your various customers you will be able to tell your story more
effectively.
As a starting point the following are potential benefits of ratings to
builders, lenders, marketing agents and consumers:
Benefits of Ratings to Builders
- Tap the Growing Market Trend Toward More Energy Efficient Homes
Across the nation there is a growing consumer demand for
high performance, energy efficient homes. This growing market demand is
best illustrated by the fact that in 2002, 3% of all new homes built met
the ENERGY STAR Homes standard.
Another illustration of the potential market power of homes that are
rated to be energy efficient is a consumer survey completed by Pulte
Homes in Tucson, Arizona. The Pulte study found that 88% of the
consumers who purchased Pulte ENERGY STAR Homes listed the energy
features of the home as important in their decision making. Click on
Pulte Homes Market
Survey (link to to view the study.- Present the Energy Efficient Builder the Opportunity to
Differentiate Their Product Through Marketing of the Energy Efficient
Features
A home energy rating provides proof for a builder to
demonstrate the energy efficiency of the home through an independent
on-site inspection by a qualified building performance professional - a
home energy rater. The energy efficient builder can differentiate his
homes in the market place through this verification.- Increase the Buying Power of Consumers
An energy efficient mortgage increases the buying power
of consumers purchasing an energy efficient home by crediting the home’s
energy savings in the loan qualification process and the home’s
appraised value. This not only increases the number of families able to
afford a home but also allows consumers to afford more of a home. A home
energy rating is the key that unlocks the access to an energy efficient
mortgage.- Demonstrate Good Corporate Citizenship by Enhancing the Quality of
the Environment and National Security
Responsible builders like to be perceived as responsible
corporate citizens in their community. The energy we use in our homes is
responsible for a large portion of pollution caused in this nation. In
addition, the large amount of oil imported to our nation from the
volatile Middle East raises serious national security concerns. An
energy efficient home reduces pollution and the demand for Middle
Eastern oil. Builders can demonstrate their corporate responsibility by
building and marketing energy efficient homes.
For more information on the benefits of home energy ratings to builders
click on Energy Rated Homes web site at
www.erha.com/builders.htm.
Benefits of Ratings to Lenders
Qualify more first time home buyers for mortgage loans
Having enough money for a down payment is a major barrier
to home ownership for many families. The energy mortgage addresses this
problem through crediting a home’s energy savings in the loan
qualification process. The new Fannie Mae My Community Energy Efficient
Mortgage product offers 100% Loan-to-Value and only $500 in closing
costs. Analysis by the Environmental Protection Agency projects that an
average of 6.8% more families would be able to qualify for a mortgage
through an energy efficient mortgage.Reduce the cost of home ownership
The cost of heating and cooling a home is the highest
cost of housing outside of the mortgage loan. The impact of energy costs
presents a special burden to lower income families. Fannie Mae estimates
that low income families spend an average of 19% of their annual income
on energy bills. Energy efficiency reduces this burden thus freeing more
money for housing.Participate in energy mortgage programs
Energy mortgages increases a consumer’s home buying power
by crediting the monthly energy savings in the mortgage. All
energy mortgage programs require a home energy rating to estimate the
savings and verify the home’s energy efficiency. The Fannie Mae
energy mortgage product is underwritten in the Desk Top Underwriting
automated loan processing program. The rating report provides all of the
information a lender needs to underwrite the loan.Determine the relative energy efficiency of the home being financed
The energy rating presents information on the energy
efficiency of a home in non-technical and easily understood terms (the
star rating). This will allow a lender to know at a quick glance the
relative energy efficiency of a home. The rating will tell if the home
meets the minimum energy code (4 Stars) or meets the ENERGY STAR Homes
standard (5 Stars).Increase confidence in the home's marketability in case of default.
Of vital concern to mortgage to the marketability of a home if
the loan goes into default and the lender must foreclose the home. A
lender should feel more confident financing a home that has been
verified as energy efficient by a rating because it will be more
marketable. In addition more families would be qualified to purchase the
home through a energy mortgage.Receive Community Reinvestment Act credits
Congress requires that lenders target a certain
percentage of their loans to meet the needs of low income and minority
families (the Community Reinvestment Act - CRA). A lender must receive a
set amount of CRA credits to keep their license. The Federal Home Loan
Bank sets the policy for the issuing of CRA credits. The Federal Home
Loan Bank has ruled that energy mortgages targeted to low income and
first-time buyers qualify as CRA credits.Reduce America’s dependence on imported oil and aid the environment
A mortgage lending firm can differentiate their business
as responsible corporate citizens by promoting energy efficiency housing
that not only fosters more affordable housing to more families but also
addresses the national concerns over the environment and national
security.
Benefits of Ratings to Marketing Agents
Have a larger pool of potential buyers who can afford more of a home
An energy efficient mortgage increases the buying power
of consumers through crediting the energy savings of a high performance
energy efficient home documented through an energy rating into the
mortgage loan. An energy efficient mortgage will not only qualify more
families for a mortgage loan but will allow a home buyer to afford more
features in a home than they would have otherwise.Present information on the energy efficiency of a home in
non-technical and easily understood terms
The energy rating presents information on the energy
efficiency of a home in non-technical and easily understood terms (the
star rating). This will allow a lender to know at a quick glance the
relative energy efficiency of a home. The rating will tell if the home
meets the minimum energy code (4 Stars) or meets the ENERGY STAR Homes
standard (5 Stars).Market the energy efficient features of the homes they are selling
Presenting information on the energy efficiency of the
home in non-technical terms allows marketing agents to market the energy
efficiency of the home in terms that a consumer can readily understand.Mitigate the lower selling price of inefficient, existing homes
through energy improvement mortgages
In most cases when a home needs repairs such as a new
heating or air conditioning system either the seller has to make the
improvements prior to closing or the seller has to reduce the price of
the home. An energy improvement mortgage presents a real estate agent
with a solution to the problem. The agent can market the energy
improvement mortgage to the prospective buyer as a way to finance the
energy improvements in the mortgage loan without additional loan
qualification or, in most cases, without any additional money down.
Benefits of Ratings to Consumers
- Determine the relative energy efficiency of a residence when
purchasing a home
Many of the energy efficient features of a home are
hidden once the dry wall goes up and it is difficult for a consumer to
know the energy efficiency of a home. A home energy rating involving
diagnostic testing, will give a home buyer a third party verification of
the home’s energy efficiency.- Make educated decisions when investing in cost-effective energy
improvements to the home
Besides providing a rating of the home and projecting its energy costs,
a home energy rating provides a home owner with a listing of
cost-effective energy improvements for the home and the economic return
on investment from making those improvements.- Add the cost of making the energy improvements to the mortgage loan
through an energy improvement mortgage
.
An energy improvement mortgage will finance the energy improvements
recommended by an energy rating as being cost-effective into the
mortgage loan at the time of the purchase or during refinancing. An
energy improvement mortgage does not require any additional
qualification and in most cases does not require any additional money
down. Mortgage interest terms are much more attractive than credit card
or consumer loans.- Qualify for a higher quality, energy efficient home
An energy efficient mortgage increases the buying power
of consumers through crediting the energy savings of a high performance
energy efficient home documented through an energy rating into the
mortgage loan. An energy efficient mortgage will not only qualify more
families for a mortgage loan but will allow a home buyer to afford more
features in a home than they would otherwise.
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