Energy Mortgages Part V

Q: What are the bid requirements for improvements made from an Energy Improvement Mortgage?

A: While competition between vendors can result in a cost savings for the consumer, there are no specific requirements to use a bid process or to take the low bid. A consumer may choose to obtain only one price on a recommended improvement, or to issue a Request for Proposal to more than one contractor.

Competition is also available for HERS Ratings Services. Some Raters work for a contractor, some work independently. Using a Rater that is employed by a contractor may or may not reduce the choice you have in selecting contractors for that specialty. An independent Certified HERS Rater does not have a financial incentive to limit your choice in contractors. All Certified HERS Raters will provide a RESNET Standard Disclosure concerning payment for services, employment, and the products or services, if any, they or their employer can supply or install.

Q: Which homes are not candidates for an Energy Mortgage.

A: A home originally built to the Energy Star Standard should be financed with an Energy Efficient Loan. This home has a HERS Rating and is efficient. The Seller should receive credit on the price of the home for the energy efficiency built into the home.

A home that needs energy efficient upgrades is a great candidate for an Energy Improvement Loan. The cost of the improvements can be included in the mortgage and the cost savings covers the increased cost and may allow the new home owner an extra cushion.

Any home the buyer would like to improve would be a candidate for an Energy Improvement Loan. For example: An Energy Star Rated Home is listed four years after construction. A potential buyer is interested in adding a renewable energy source. This home with a HERS Rating of 82 in 2006, would be a candidate for a new Audit and an Energy Improvement Loan to cover the cost of a renewable energy source.

Q: How do I determine if a home was built to Energy Star Standards.

A: The seller will probably share the information with you. They would be thinking of this rating as an added selling feature. If not, check the Circuit Breaker Box. A HERS Rating Label is usually placed on the box, by the original Rater. This would also demonstrate an older home that had been audited and improved after construction.

Q: How would a homeowner, or realtor determine if a home without a HERS Rating Label is worth the time investment to pursue an Energy Improvement Loan. Is there an age, or amount of insulation, or other indicator?

A: The best indicator for an existing home’s need for an energy improvement loan would be to obtain an Annual Utility Usage Analysis. The seller can obtain from his records or from the utility company the past twelve months of usage and amounts from both electricity and gas or propane, a certified HERS Rater can apply the Analysis and the amount of use could be pinpointed.

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