Fannie Mae - RESNET
Agreement on Energy Report for Fannie Mae Energy
Mortgage Products
February 5, 2003
Mr. Steve Baden
Executive Director
Residential Energy Service Network
P. O. Box 4561
Oceanside, CA 92052
Re: Preparation of Fannie Mae's "Energy
Efficient Mortgage" Energy Report
Dear Mr. Baden:
As you know, Fannie Mae has been supportive
of the work of RESNET, and to further the goals of energy efficient home
construction and retrofitting, Fannie Mae has updated its "Energy Efficient
Mortgage" product. In order to recognize the energy efficiency of the
particular property, the lender must receive an "Energy Report" from a
rating provider who has been accredited by RESNET under the "Mortgage
Industry National Home Energy Rating Systems Accreditation Standards,"
as adopted by the RESNET. (an "Energy Rater"). This letter
updates the understanding between RESNET and Fannie Mae evidenced by our
letter to you of July 8, 2002, and as a result, this letter restates and
replaces our letter to you of July 8, 2002.
To prepare the Energy Report, the Energy
Rater must receive from Fannie Mae the "assumed note rate" to be used for
the particular calendar year (referred to herein as the "Assumed Rate"). We
will make such assumed note rate available to RESNET prior to the beginning
of a calendar year for use in the ensuing year, and RESNET agrees to forward
the information to its Energy Raters.
We wish to receive RESNET's confirmation that
the Energy Report (sample form attached hereto as Attachment "A") will be
prepared by the Energy Rater in accordance with the following:
We wish to receive RESNET’s confirmation that
the Energy Report (sample form attached hereto as Attachment “A”) will be
prepared by the Energy Rater in accordance with the following:
- The Energy Rater will calculate the
“Energy Savings” under the “Mortgage
Industry National Home Energy Rating Systems Accreditation Standards,”
as adopted by the RESNET.
- For a property that is newly constructed
or is energy efficient “as is,” the Energy Raterwill calculate the
“Energy Savings Value” as follows:
- The Energy Rater will otherwise follow
the current guidelines of RESNET’s “Mortgage Industry National
Home Energy Rating Systems Accreditation Standards,”
- Using the weighted average physical
life of the energy measures (the result is referred to as the “Energy
Life”), calculate the present value of the Energy Savings using the
Assumed Rate applied to the Energy Life.
- The result is the Energy Savings Value
for a property that is newly constructed or is energy efficient “as
is.”
- For an existing property that would
benefit from energy improvements, the Energy Rater will calculate the
“Energy Savings Value” as follows:
- The Energy Rater will otherwise follow
the current guidelines of RESNET’s “Mortgage Industry National Home
Energy Rating Systems Accreditation Standards.,”
- Using the weighted average physical
life of the energy measures (the result is referred to as the “Energy
Life”), calculate the present value of the Energy Savings using the
Assumed Rate applied to the Energy Life—such present value is referred
to herein as the “Energy Savings PV.”
- Compare the Energy Savings PV with the
installed cost of the energy improvements. The lesser of (I) the
Energy Savings PV or (ii) the installed cost is the Energy Savings
Value for a property that would benefit from energy improvements.
- All raters and rating providers must
disclose their financial interest in the home being financed with a
Fannie Mae Energy Efficient Mortgage to the home buyer and mortgage
lender using the “RESNET Home Energy Rating Standard Disclosure” Form. Raters nor
the rating provider who are the seller, agent for the sale, the builder
or the developer of the project of the home being financed can not rate
the home for a Fannie Mae Energy Efficient Mortgage.
Please indicate your acknowledgment of the
terms of this letter by signing as indicated below.
Thank you for your cooperation.
Sincerely,
Robert J. Sahadi
Vice President—Product Innovation and Technology Transformation
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