Sw creative financing 2 25

Creative Financing, Energy, and Design Options for the Residential Market David Lantz Owner Shelterwood [email_address] www.prairiegreenhomes.com

Welcome ,[object Object],[object Object],[object Object]

Agenda ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Energy Improvement Mortgage (EIM): What We Stand to Gain ,[object Object],[object Object],[object Object],[object Object],[object Object]

Energy Improvement Mortgages ,[object Object]

The Roebels in Cincinnati, Ohio ,[object Object],[object Object],[object Object],[object Object],[object Object]

Home Energy Rating Results ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Home Energy Rating Results Estimated 20% air leakage reduction resulting from new windows and rim joist insulation. *Windows also qualify for an additional 30% tax credit. **The monthly finance cost is the monthly payment, including interest, that will pay for all the tabulated improvements when they are financed with a 30-year fixed mortgage at 4.75%. Measure Cost Savings New vinyl windows U-29, SHGC-0.29* $4,488 $358/year New closed-combustion water heater $400 Rim joist insulation and air sealing with DIY kit $300 Total $5,188 Month Cash Flow $27/month** $30/month

Results ,[object Object],[object Object],[object Object]

Lessons Learned ,[object Object],[object Object],[object Object],[object Object],[object Object]

Jane’s New Home Purchase in Cincinnati ,[object Object],[object Object],[object Object]

Home Energy Rating Results Measure Cost New roof and decking $7,000 Chimney repairs $1,000 Electrical modernization $5,000 HVAC; new dual-fuel heat pump and duct repairs $7,500 Water heater replacement to tankless model; requires chimney repair $2,200 Insulated and air-sealed ceiling $1,600 Insulated walls in 2x4 stud cavities $4,300 Insulated foundation walls and air sealing rim joist cavities $1,700 Total Added Cost to Mortgage Extra Monthly Finance Cost Monthly Energy Savings Monthly Cash Flow ~$30,000 $140 $260 $120

Finance Options and Challenges ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Not an Ideal Outcome ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Getting the Ideal Outcome ,[object Object],[object Object],[object Object]

The Energy Efficient Mortgage: A Solution to the Mortgage Problem ,[object Object],[object Object],[object Object],[object Object],[object Object]

Energy Financing Programs Can Drive the Home Renovation Economy ,[object Object],[object Object],[object Object],[object Object],[object Object]

FHA Section 203(k) Loan Program ,[object Object]

What Is a 203(k) Loan? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

203(k) Mortgage Background ,[object Object],[object Object],[object Object],[object Object]

Two Types of 203(k) Loans ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

203(k) Mortgage Details ,[object Object],[object Object],[object Object],[object Object]

Examples of Repairs Allowed ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

203(k) Loan Process ,[object Object],[object Object],1 ,[object Object],2 ,[object Object],3

203(k) Loan Process (cont.) ,[object Object],4 ,[object Object],5 ,[object Object],[object Object],6

203(k) Loan Process (cont.) ,[object Object],[object Object],7 ,[object Object],[object Object],8 ,[object Object],9

Energy Mortgages ,[object Object]

Two Types of Energy Mortgages ,[object Object],[object Object],[object Object],[object Object],[object Object]

VA Energy Mortgage Details ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

VA Energy Mortgage Details (cont.) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

VA Energy Mortgage Example ,[object Object],[object Object],Appraised Value of Home $120,000 Interest Rate 8.5% Term of Loan 30 Year Cost of Energy Improvements $3,400 Projected Monthly Energy Savings $32.50 Monthly Mortgage Payment Increase $26.14

FHA Energy Mortgage Details ,[object Object],[object Object],[object Object],[object Object]

FHA Energy Mortgage Details (cont.) ,[object Object],[object Object],[object Object],[object Object],[object Object]

FHA Energy Mortgage Example Standard Loan Home Sale Price $60,000 Interest Rate 8.0% Closing Cost $1,200 Cost of Energy Improvements $3,000 Average Life of Measures Calculated by Rating 10 Years Monthly Energy Savings $40 Standard Underwriting Sales Price $60,000 Appraised Value $60,000 Closing Cost $1,200 LTV 97.75% Loan Limit $58,640

FHA Energy Mortgage Example Energy Improvement Loan Energy Premium Calculation is essentially the Present Value of energy savings over the useful life of those improvements minus the cost of the life of the improvements. Standard Loan Calculation $58,640 Cost of Energy Improvements $3,000 Average Life of Measures Calculated by Rating 10 Years Annual Energy Savings $480 Energy Premium (calculated by energy rating software) $3,220 New Loan Amount Standard Loan Calculation $58,640 Energy Improvement Mortgage $3,000 New Loan Amount (no additional down payment nor income required to qualify) $61,640

Freddie Mac Energy Mortgage Details ,[object Object],[object Object],[object Object],[object Object],[object Object]

Freddie Mac Energy Mortgage Details (cont.) ,[object Object],[object Object],[object Object],[object Object],[object Object]

Freddie Mac Energy Mortgage Example Interest Rate 8.0% Borrower’s Monthly Income $2,900 Cost of Energy Improvements $3,000 Projected Monthly Energy Savings from Rating $75

Freddie Mac Energy Mortgage Example (cont.) ,[object Object],Conventional Mortgage Energy Improvement Mortgage Home Purchase Price $100,000 $103,000 Down Payment $10,000 $10,307 Mortgage Qualified for $90,000 $100,200 Monthly PI Qualified for $660.39 $735.39 Taxes and Insurance $139.61 $139.61 PITI $800.00 $875.00 Less Monthly Energy Savings $0 $75 Adjusted LTV 90% 97% Consumer Buying Power $90,000 $100,221

Fannie Mae Energy Mortgage Details ,[object Object],[object Object],[object Object],[object Object],[object Object]

Fannie Mae Energy Mortgage Details ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Fannie Mae Energy Mortgage Example Purchase Price $100,000 Cost of Energy Improvements $3,000 Projected Monthly Energy Savings from Rating $50

Fannie Mae Energy Mortgage Example (cont.) ,[object Object],*Not including monthly energy costs. Conventional Mortgage Energy Improvement Mortgage Home Purchase Price $100,000 $103,000 Down Payment $10,000 $10,000 Mortgage Qualified for $90,000 $93,000 Monthly PI Qualified for $614 $634 Less Monthly Energy Savings $0 $75 Monthly Housing Cost $614* $584

Energy Loan Summary ,[object Object],[object Object]

RESNET Residential Energy Services Network ,[object Object],[object Object],[object Object],[object Object]

Energy Efficiency: “The First Fuel” ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why Buildings Are Important ,[object Object]

Why Buildings Are Important (cont.) ,[object Object]

The Average American Home 1 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],1. RECS 2001 : http://www.eia.doe.gov/emeu/recs/ 2. Brookings Institute

Steps That Need to Be Taken ,[object Object],[object Object],[object Object]

What Is RESNET? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Building Energy-Efficiency in US ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Zero Energy “Yardstick” ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],HERS = Home Energy Rating System.

Status of Federal Tax Credits ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

National Energy/Climate Change Legislation ,[object Object],[object Object],[object Object],[object Object],[object Object]

Estimating Energy Savings ,[object Object]

Estimating Energy Savings ,[object Object],[object Object],[object Object],[object Object]

Home Energy Rating System (HERS) Index ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Preserves Natural Resources TCF = trillion cubic feet. 5 TCF of Natural Gas ,[object Object],[object Object]

Case Study: 1950 Ranch in Lexington, KY ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

List of Measures to Consider ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Air Infiltration ,[object Object],[object Object],[object Object]

Air Sealing/Infiltration Control What Is Infiltration? Windows Attic Hatch Plumbing Ceiling Lights Wiring Floor Foundation Floor Chimney Exterior Doors Typical Sources of Air Leakage in the Home Penetrations Top Plate

Air Infiltrations ,[object Object],[object Object],[object Object],[object Object],[object Object]

REM/Rate Improvement Analysis (cont.)

Wall Insulation ,[object Object],[object Object],[object Object]

Symptom: Light Mold Spotting in Crawl Space

Typical Response: Add Ventilation

85 F 60% RH 70 F DP 73 F 90% RH 70 F DP Framing: 70-78 F Ducts: 55-65 F H 2 O Pipes: 55-65 F Floor: 65-70 F

Phase I Crawl Space Relative Humidity 50 60 70 80 90 100 6/3 6/13 6/23 7/3 7/13 7/23 8/2 8/12 8/22 9/1 Relative Humidity (%) Wall Vented Closed Outside

Duct Sealing: What’s Missing From This Picture?

Furnace Replacement ,[object Object],[object Object],[object Object]

Heat Pump Scenario ,[object Object],[object Object]

Air Conditioner Replacement ,[object Object],[object Object]

Show Me the Money ,[object Object],[object Object],[object Object],[object Object],[object Object]

Return on Investment ,[object Object],[object Object]

Complete Package With Heat Pump

Resources ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Questions www.prairiegreenhomes.com David Lantz Owner Office: 812-333-2991 Cell: 812-325-6931 [email_address] Mark Quigley Energy Consultant Office: 812-333-2991 Cell: 812-325-5299 [email_address]

Sw creative financing 2 25

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