Sec. 3. Findings and purposes
250 words·~1 min read·
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Congress finds that— energy costs for homeowners are a significant and increasing portion of their household budgets; household energy use can vary substantially depending on the efficiency and characteristics of the house; expected energy cost savings are important to the value of the house; the current test for loan affordability used by most covered agencies, commonly known as the debt-to-income test, is inadequate because it does not take into account the expected energy cost savings for the homeowner of an energy efficient home; and another loan limitation, commonly known as the loan-to-value test, is tied to the appraisal, which often does not adjust for efficiency features of houses.
The purposes of this Act are to— improve the accuracy of mortgage underwriting by Federal mortgage agencies by ensuring that energy cost savings are included in the underwriting process as described below, and thus to reduce the amount of energy consumed by homes and to facilitate the creation of energy efficiency retrofit and construction jobs; require a covered agency to include the expected energy cost savings of a homeowner as a regular expense in the tests, such as the debt-to-income test, used to determine the ability of the loan applicant to afford the cost of homeownership for all loan programs; and require a covered agency to include the value home buyers place on the energy efficiency of a house in tests used to compare the mortgage amount to home value, taking precautions to avoid double-counting and to support safe and sound lending.