Energy Efficient & Location Efficient Mortgages!!

The Livable Communities Act of 2009 will create two new lending practices based on energy efficiency of a home and also on its LOCATION!



The Director shall conduct a study on—

(A) The development of a housing location affordability index that includes housing and transportation costs; and

(B) Ways in which the affordability index described in subparagraph (A) could be made available to the public to inform consumers of the combined costs of housing and transportation.

(C) INCENTIVES FOR ENERGY-EFFICIENT MORTGAGES AND LOCATION-EFFICIENT MORTGAGES.—

“Energy-efficient mortgage’’ means a mortgage loan under which the income of the borrower, for purposes of qualification for such loan, is considered to be increased by not less than $1 for each $1 of savings projected to be realized by the borrower as a result of cost-effective energy-saving design, construction, or improvements (including use of renewable energy sources, such as solar, geothermal, biomass, and wind, super-insulation, energy saving windows, insulating glass and film, and radiant barrier) for the home for which the loan is made

‘‘Location-efficient mortgage’’ means a mortgage loan under which—

(i) the income of the borrower, for purposes of qualification for such loan, is considered to be increased by not less than $1 for each $1 of savings projected to be realized by the borrower because the location of the home for which the loan is made will result in decreased transportation costs for the household of the borrower; or

(ii) the sum of the principal, interest, taxes, and insurance due under the mortgage loan is decreased by not less than $1for each $1 of savings projected to be realized by the borrower because the location of the home for which the loan is made will result in decreased transportation costs for the household of the borrower.

IN GENERAL.—The Director shall conduct a study on incentives for encouraging lenders to make, and homebuyers and homeowners to participate in, energy-efficient mortgages and location-efficient mortgages, including—

(i) fee reductions;

(ii) fee waivers;

(iii) interest rate reductions; and

(iv) adjustment of mortgage qualifications.

In studying the incentives under subparagraph, the Secretary shall consider the potential for lower risk of default on energy-efficient mortgages and location-efficient mortgages in comparison to mortgages that are not energy-efficient or location-efficient.

How does that work for you?