Home energy efficiency plays a big part in determining how
much home your buyers can afford to purchase -- an advantage you
can apply in selling more homes.
Iowa's new Home Energy Rating System (HERS) provides a lender or appraiser with a reliable estimate of how much monthly income will go for energy use. Lenders are using that information to offer better qualifying ratios to buyers who purchase more energy efficient homes. Buyers purchasing less efficient homes are allowed to finance energy improvements as part of their purchase and begin reaping the increased comfort and energy savings right away.
You can help stretch your buyer's purchasing power by arranging an Energy Efficient Mortgage (EEM) or an Energy Improvement Mortgage (EIM). If you are selling an energy rated home, you can include the rating in your fliers, in classified ads, and on signs.
The cost is set by the independent certified energy raters. HERS' support of raters during the program's introduction makes the cost very affordable - in the neighborhood of $250.
Anyone can - the seller, the buyer, the real estate agent, the lender or the builder
No. However, ratings are an opportunity for sellers to show off energy performance and for buyers to obtain special financing through the new loan packages.
The energy rating system and the EEM can be profitable tools for real estate agents. You can use EEMs to qualify some prospective home buyers for homes they could not otherwise afford. Buyers of energy efficient homes can also qualify for higher mortgages, which means higher commissions for real estate agents. With EEMs a buyer has access to a 2% stretch in the debt-to-income ratio used to decide monthly mortgage payments. This 2%, made up in utility savings, equates to thousands of dollars in added buying power, giving the buyer the ability to purchase a more expensive home.
Real estate agents and brokers can become StarTrac Realtors® by taking advantage of a short training program on the rating system and the new loan products. StarTrac Realtors® may use the Energy Rated Homes™ logo in their advertising to home buyers, builders and lenders.
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Energy Rated Homes of Iowa
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