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Climate change. While stopping it may seem like a gigantic task, the place to start may actually be close to home.
President Biden believes so. His administration’s climate strategy features residential energy efficiency prominently, both in upgrading 2 million homes to be energy efficient and building 1.5 million new homes to a higher standard.
This challenge builds off research highlighting residential energy efficiency as one of the top steps our society must do to reduce emissions. The National Resource Defense Council calls it the number 1 carbon reduction opportunity. And of course, it creates jobs. While a real climate commitment is promising for what we consider green jobs in solar, wind and electric vehicles, it also means we will need the construction trades: insulators, HVAC techs, plumbers, electricians and glaziers to seriously cut building emissions.
Green Mortgages?
But what if we could make other jobs connected to the housing sector green also? What if realtors, appraisers, and mortgage lenders could have a critical role in reducing carbon emissions and energy bills for their clients?
That is the approach put forward by a number of us who urge “green mortgages, both for purchases and for refinances that could actually cost you nothing. Green mortgages work by rolling in the cost of energy improvements into the mortgage. With the monthly utility bill savings more than the additional cost on your monthly mortgage payments, and nothing extra upfront, it is effectively no-cost. It allows those who thought they could never afford to do right by the planet to both do so and be rewarded for it with solar panels, air sealing and high efficiency plumbing, to name a few examples. If your mortgage would cost $20 more per month to reduce your utility bills by $50 per month, and you’d be helping the planet, would you do it?
All this is possible because of new “green mortgage” programs offered by mortgage backers such as Fannie Mae, Freddie Mac, VA and FHA. These quasi-public and government agencies have changed the rules to make it easier to go green. Before, those with lots of home equity or large down payments could add in solar panels when buying or refinancing, but most people can’t. Or at least they couldn’t. Now thanks to the green mortgage they can.
But it makes the job of realtor and mortgage lender invaluable. Those looking for a green mortgage can’t do it without their lender or agent's support. Some banks like Associated Bank provide them, but most don’t, even though doing so would not be difficult and they would be able to lend more, safely.
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Over 50,000 conventional mortgages are offered annually in Wisconsin that could be green mortgages. Available data suggests over 75,000 homes in the state are likely eligible to refinance that could be green. Our era’s climate challenge is a great opportunity for mortgage lenders, realtors, and contractors.
How They Work
Green mortgages start with a home assessment to find energy-saving opportunities. The bank accepts contractor quotes, incorporates them into the mortgage at the low interest rate during purchase or refinance, and the borrower uses this extra money to pay for the projects. For every $1 invested, the home’s utility bills are slated to reduce by more than $1. Homeowners move their payments away from utilities, splitting the savings with the bank.
Courtesy of Michele Hilbert
Michele Hilbert
MPS educator Michele Hilbert knows we need to show others how we can fight climate change right here. She worked with Green Homeowners United to cut her Bay View home’s emissions through a green refinance that reduced her utilities bills and mortgage interest rate. Green Homeowners United navigates lenders, provides energy assessments and economic modeling, and coordinates construction.
Hibbert’s green mortgage covered water efficiencies, LEDs, duct sealing, reducing attic heat loss and a 7-kilowatt solar system that most months will mean no electric bill at all. Her interest rate fell below 3%, and her monthly mortgage changes are less than utility savings, effectively making this no-cost for her. Roll in a $3,000+ federal renewable tax credit, and Hibbert is being rewarded for protecting the planet.
Her panels were installed by Dairyland Energy, one of the few minority-owned, union solar installers in the Midwest. Dairyland Energy's workers are affiliated with IBEW 494 and Plumbers 75. They areh igh-skilled union jobs that cut carbon emissions and make living in Milwaukee more affordable.
“It really opens up conversations with people, especially my students, who are anxious about climate change,” Hibbert says about her home upgrades. “The problem can feel so big, but it gives others hope to show we can start right at home!”
Green Homeowners United helps people like Hibbert who thought major action to curb emissions was out of reach. It turns out you may be able to, and you should start at home.
4 Ways to Fight Climate Change in Homes
- Share this article with realtors so they can help buyers become green homeowners
- If your mortgage interest rate is over 3% contact Green Homeowners United about a “green refinance”
- Get an energy assessment of your home. We can help
- Ask your bank or credit union if they offer green mortgages, and if not introduce them to us to start
Let's make a difference, together. Visit us at www.GreenHomeownersUnited.com or email me at Kevin@GreenHomeownersUnited.com to help.
Kevin Kane is a frequent contributor to the Shepherd Express, a board member of Citizen Action of Wisconsin and works for Green Homeowners United.
