2. Introduction
Rick Williams
• Realtor Outreach Campaign, Santa Clara County
Energy Upgrade CA
• Mortgage Loan Originator for a mortgage banker
• American Pacific Mortgage
• USGBC & Build It Green
• CBPCA “How to Finance without PACE” webinar leader
• Efficiency First Finance & Real Estate Committees
• Skyline & Ohlone College Instructor: Energy Efficiency
Opportunities for Realtors and Mortgage Professionals
3. Class Objectives
• Why Energy Efficiency / Green Building?
• Energy Assessments & Upgrades
• Green MLS: Listing & Buying
• Available renovation financing
• Commercial Energy Use Disclosure Law
• Net Zero and Passive Homes
• How to profit with Energy Efficiency
4. Who are the Players in Energy Efficiency?
• PG&E, Edison, SDG&E
– All investor owned utilities, IOUs, collect
funds from ratepayers that serve as rebates
for energy efficiency
• CPUC, (California Public Utilities Commission) regulates the
IOU utilities
• CEC(California Energy Commission) sets the energy
targets and regulations
– Title 24 New version July 1st
– CalGreen
6. Save Money
NAR’s May 2011 study
• 88% of homebuyers thought heating and
cooling were important
Poor duct sealing can lose 20% of conditioned air
Proper insulation reduces heating and cooling costs
7. Improve Home Comfort
• Energy efficient windows can make homes
quieter and more attractive at the same time
• Seal air leaks to reduce drafts and keeps warm
air from escaping during the winter and cool air
in the summer
• Proper HVAC ducting provides comfort in all
rooms
8. Create a Healthier Home
• Combustion safety tests ensure all gas
appliances are venting correctly – providing
home owners peace of mind
• Sealing vents and ducts saves energy and
improves air quality
Crawlspace Cleaned & Air Sealed
9. Green Labeled Homes add 9% Premium
• Study of 1.6 million homes in CA
• UCLA and UC Berkeley researchers
• Green Labeled homes sell for 9% more
– LEED for Homes
– EnergyStar
– GreenPoint Rated
• Most important in hotter climates
10. CA Home Energy Rating Disclosure
• California Civil Code 2079.10
• Realtors and Brokers must inform
buyers in each transaction & sign
• HERS Whole House Audit option
• Demonstrate energy value of home
• Suggest energy assessment for potential energy
upgrade before move in
11. Why do we need to renovate buildings?
• Homes built before 1974 (Title 24) had no
energy efficiency standards
– Drafty 70% of CA stock
– Unhealthy
– High energy costs
• Energy costs increase 4 to 5% each year
• Plug loads continue to increase
12. Government Mandates
• California’s Goals
– Reduce energy consumption by 20% for
130,000 homes by 2013
– Energy Upgrade California
– New construction to be Zero Net Energy
by 2020 Residential & 2030 Commercial
• Berkeley RECO
– Prescriptive list of energy & water
conservation at time of sale or remodel
• Energy Audits at time of sale??? Someday.
• AB1103 Energy Use Disclosure in effect
13. SAVE ACT
• In the Senate
• Update National Underwriting
• Principal & Interest & Tax & Insurance
• PITI + E E = Energy Costs
• Energy costs > tax or insurance
• Make EE homes more accessible
14. Summary Why EE and Green Building?
• Save money …. Energy costs inc. 4 to 5%
• Healthier .. Indoor Air Quality
• Sell homes faster and for more $
• Government Mandates increasing
• Home Energy Rating Disclosure
16. What is an Energy Upgrade?
An Energy Upgrade comprehensive, whole-house
approach to improving energy efficiency and home
comfort, while helping to protect the environment.
17. • Moisture leaks
• Potential air leaks
• Hidden attic bypasses
• Crushed, ineffective
ductwork
Proper inspections can reveal:
Why Get an Energy Assessment?
18. • A blower door test to determine
your home’s air leakage which
contributes to higher energy costs
• Thermographic camera tests
that use infrared images to assess
the effectiveness of your home’s
insulation
• Combustion and safety
testing to detect carbon monoxide
and gas leaks
What Is a Home Energy Assessment?
A Home Energy Assessment is a series of
advanced, diagnostics tests performed to
understand what energy efficiency investments
can reduce your energy use:
19. • Inadequate attic
insulation
• Improper insulation
• Important thermal issues
Why Get an Energy Assessment?
Proper inspections can reveal:
20. Who Should Get an Assessment?
• Homeowners who want to save money
on energy bills/stop wasting energy
• Those who are in in the market for new
homes or home improvements
• When HVAC goes down or PV goes up on
roof
• (HVAC repair, solar panels)
• With home comfort issues (drafty rooms,
leaky windows, etc.)
21. Prescriptive vs. Performance Rebates
• Prescriptive
– Checklist Does it Exist?
– No inspection and valuation
– Proof of purchase
• Performance
– Energy Assessment required
– Test In What are original conditions?
– Test Out After the work is done
– Achieve computer modeled improvements
24. Loading Order
1. Air Sealing
2. Thermostat set points
3. Insulation / Ventilation
4. Heating & Cooling
5. Water Heating
6. Lighting
7. Old Appliances
8. Windows & Doors
Solar Panels
Impact Energy, Inc.24
25. Benefits of an Energy Upgrade
• Improved
comfort
• Improved
efficiency
• Cost savings
• Greener living
26. Energy Upgrade California Rebates
• Rebates per decrease percentage of energy modeled
» 20% $2,000
» 30% $3,000
» 45% $4,500
• For more information: energyupgradeca.org
• Must use a Participating Contractor for
rebates
• Energy Upgrade California
offers Whole Home rebates to
reward for energy efficiency
needs as a system instead of
piece by piece.
27. Energy Upgrade Steps to Rebate
1. Find Participating Contractor
2. Complete Home Energy Assessment
3. Review Findings & Recommendations
4. Review & Sign Contract
5. Secure Financing if needed
6. Install Energy Efficient Improvements
7. Work is inspected
8. Rebates to homeowners
28. Energy Upgrades as Part of Sale
• Look at the Disclosure you sign
• Whole House Sale
• What are the utility bills for 12 months?
• Obvious improvements
– Old furnace & ducting
– Insulation
– Windows
– Appliances
• Seller credit or suggestion for buyer
budget
29. Timing for Renovation or Energy Upgrade
• Before move in
• Funding with first mortgage
– 203K, HomeStyle, Homepath
Renovation
– Buyer’s extra cash
• Second Mortgage
– Home Equity Line
– Title One
– PowerSaver
31. Green MLS @ MLSlistings
• Green / energy fields exist now
• MLSlistings to expand Green MLS
• Energy upgrade items listed
• Sellers: Distinguish your listings
• Buyers: eco conscious clients
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33.
34.
35. Seller’s Green Staging Advantage
• “Green certified homes sold for 30% more
– and sold 21% faster” GET HERS RATING
• Provide an Energy Assessment to buyers
– Complete disclosure
– Demonstrate path to energy efficiency with
the contractor recommendations
• Install CFL light bulbs & LED
• Install Programmable thermostat
• Provide 12 months utility bills
• Show EnergyStar labels on new appliances
36. Buyer’s Search for best home
• Establish buyer’s priorities
– Energy costs, air quality, health
• Define key criteria to search MLS
– Programmable thermostat
– Insulation
– Sealed crawlspace
• Provide energy upgrade pathway with
renovation funding
– Insulation
– Air sealing etc.
38. SHEA XERO ZERO NET ENERGY
• SOLAR POWER SYSTEM
• DUAL-PANE, LOW-E VINYL WINDOWS
• JENN-AIR® ENERGY STAR® APPLIANCES
• BLOWN-IN WALL INSULATION
• INSULATED GARAGE DOORS
• DIGITAL PROGRAMMABLE THERMOSTAT
• CFL BULBS
• OCCUPANCY SENSOR SWITCHES
40. What is HERS ?
Home Energy Rating System administered by the
California Energy Commission (CEC)
• Estimates and compares home energy efficiency
• Identifies energy-saving improvements
• Reduces risk by providing full disclosure of
energy usage
• Completed by a HERS Rater or Auditor
• Required for Energy Efficient Mortgage EEM
40
41. Sample HERS Rating Certificate
41
Home Energy Rating
Score
Energy Efficiency
Levels of Rated
Features
Energy Consumption
and Operating Costs
42. Other Green Labels
• LEED for Homes
– High end rating from USGBC
• GreenPointRated
—Rating system used by most CA
municipalities BuildItGreen
• EnergyStar
—EPA standard
43. New Home Builders Feature Energy Efficiency
RESNET works with new home
builders in promoting HERS
2013 rated homes >> 218,864
Average score was 64 of 100
KB Homes provides energy ratings
for all homes.
Shea Homes builds net zero homes
45. Financing Considerations
• What is the Client’s Urgency?
• Reactive ..”No furnace in January”
•Line of Credit,
•Unsecured loan to $25,000
• Proactive .. “Home Renovation”
•Refinance
•Purchase
46. Unsecured Loans
• Up to $25,000
• No Income documentation
• No appraisal
• Shorter loan term & higher monthly
payments
• Contractors manage the application
• Same day approval
47. Energy Loan
• Viewtech Financial Services, Anaheim
• 14.99% with 720 FICO
• 16.99% to 680 FICO
• Unsecured $5,000 to $20,000
• Fast 1 hour approvals online
Pete Schouten 530-753-1603
48. Instant In-Home Approvals 24-hours a day
with simple 1 page loan document
5.99%, 7.99%, 9.99%,11.99% & 13.99% Fixed
For Life APRs
(one time buy down cost)
Loan Amounts from $5,000 - $25,000
Unsecured loan… no lien on property
Contractor Direct Funding within 48 hours of
completion
49. FHA Title One Home Improvement
• Secured loans to $25,000
• Unsecured to $7,500
• Manufactured home on land $17,500
• Full documentation, yet no appraisal
nor equity requirement
• Term between 5 & 20 years
• Interest 6.95% to 11.95%
• 50% Funding before work starts
• Contractor program 24 x 7
Admirals Bank
401-248-7317
50. PowerSaver Attributes
• Title One Loans
• 50% up front to contractor
• Up to $25,000 and 100% CLTV
• 14 day funding
• 15 year term for energy upgrades
• 20 year term for renewable
• Interest 7.25% on 15 year term
51. Secured Financing Options
• Conventional Mortgage Cash Out Refinance
• FHA 203K Renovation Loans
• FHA Title One Home Improvement Loans
• FHA PowerSaver
• Energy Efficient Mortgages, EEMs
• Line of Credit
52. FHA 203K Renovation Loan
• Purchase distressed properties
─ 3.5% down/ 30 year financing
─ gift funds OK
─ Non resident borrower OK
─ Assumable mortgage on resale
• Refinance also with 2.5% equity
• New homeowners get rebates
• Loan limits to $625,000 in Bay Area
• The 203K is a First Mortgage
53. Energy Efficient Mortgage, EEM
• Up to 5% of appraised value for cost effective
energy solutions ONLY
• Added to new first mortgage
• Requires HERS test (energy audit)
• Combine with 203K for serious rehab
• For ex.: on a $400,000 appraised home
– 5% EEM = $20,000
– 203K = $35,000
– Total: $55,000 for rehab - all in 30-year fixed
loan
• Best to use a Facilitator
55. Renovation First Mortgages
Homestyle
FHA 203K
Streamline
FHA 203K
Standard
Renovation
Money
up to 50% of
appraised finished
value
$35K No Cap
Down payment
Owner 5% 3.5% 3.5%
Investor 25% Not Available Not Available
Loan
Maximum
$625K $625K $625K
Mortgage
Insurance
MGIC only 1.125% 1.125%
57. Will this increase my home value?
• Comfort, health &
– reduced energy cost
• Key Aspects
– Green MLS
– Green certification
– Lower Utility bills
• Study shows 9%
increase in price
58. CA Study shows 9% Premium for
Green Labeled Home
• UCLA / Berkeley Study
• 1.6 million homes
• Green labeled home
– Sells for 9% more
• Work with Sellers on
getting the labels
61. Securing Appraisal Value
• Presenting documentation to appraiser
– Energy Assessment
– Invoice Furnace
– Showing insulation
• Green Certification attached to MLS
• Green documentation for all features
– This avoids GreenWashing
• Providing Utility Bills
62. AB1103 ENERGY DISCLOSURE LAW
• Effective January 1, 2014
• Sale, Lease or Refi of ENTIRE BUILDING
• Non Residential Buildings > 10,000 Sq Ft.
• Building Types exempt:
– Industrial, Multi-Residential
• Failure to provide disclosures creates liability
63. Portfolio Manager
• Building Owners must provide 12 months
utility data
• Complete Benchmarking with Portfolio
Manager software
• Submit to Counterparty and to the CEC
• Score from comparison to like buildings
• EnergyStar Award available with 75 score
64. Net Zero Energy
• California Law
• All new Construction to be Net Zero
Residential 2020
Commercial 2030
• Very efficient system design
– HVAC, Windows, Insulation
• Renewable power needed
65. Certified Net Zero Home in Willow Glen
3,200 sf comfort w/ no energy costs
Mercury News 3.27.14
66. What is Net Zero Home?
• Whatever energy is used is offset by
renewable power
• Key aspects of the design
– Thick insulation
– Triple Pane windows
– PV on the roof to offset use
– Heat Recovery Ventilators
68. Green Building Resources
• Build It Green
• ElevateEnergy.org
• NetZero
• Passive House
• Energy Upgrade CA
• CHERP.org
69. Selling Energy Efficiency & Profiting
• Stay Ahead of the Curve
• Build client rapport with “green”
knowledge
Utility costs + Comfort + Health
• Sell homes quicker and for more $
