Vermont Energy Mortgage

Energy Futures Group (EFG) has partnered with Vermont State Employees Credit Union (VSECU) and others to develop a low-cost, innovative approach to incorporate actionable energy information into the mortgage process and finance energy improvements in existing homes. Currently, energy is virtually invisible in the residential mortgage market, home buyers rarely know their expected energy costs, appraisers don’t understand how to value energy performance, sellers and their real estate agents don’t want to complicate the sales process, and lenders don’t have reliable information or the motivation to help buyers improve the energy performance of their homes. Yet, long-term, low-interest rate mortgage loans are the most cost-effective vehicle to help buyers upgrade energy features and reduce operating costs of the home they are buying and will be operating for years to come. EFG, VSECU and others will design, develop and test a streamlined approach to flagging high-energy-cost homes in the mortgage process and then offer them financing and contractor solutions to make energy efficiency improvements. ClearlyEnergy will enhance their automated energy model (AEM) in consultation with NEEP on their Home Energy Labeling Information eXchange (HELIX) to estimate the energy cost of these homes. An Energy Coach and VSECU staff will encourage home buyers and refinancers of high energy-cost homes to order a Home Energy Score, and recommendations will be offered to be financed as part of the mortgage. Partner contractors will complete the work and re-score the homes. Phase 1 will design the Vermont Energy Mortgage process with VSECU and develop the lender resources and training for loan originators and underwriters. The team will customize the Energy Estimator- Powered by HELIX for VSECU’s approach and test the Vermont Energy Mortgage with 10 customers. An advisory committee will be established and a public webinar with lessons learned will be held towards the end of phase 1. Phase 2 will build out the Energy Estimator system, incorporate it into VSECU’s mortgage origination and underwriting systems, partner with contractors to credential and support them as Home Energy Score Assessors and facilitate Vermont Energy Mortgages to encourage and finance energy improvements as part of the mortgage process in at least 50 existing homes. At the same time, we plan to bring on another Vermont lending institution in Vermont and/or another state (e.g., Connecticut).We also plan to grow the advisory committee. EFG, Efficiency Vermont and BPPA-VT will grow the number of Home Energy Score assessors and also bring in other lenders to expand the commercial opportunities of the Vermont Energy Mortgage in Vermont. NEEP will identify lenders and contractor partners in other states in the Northeast to grow the Energy Mortgage concept beyond Vermont.