Energy, heating and cooling costs are the largest utility expense for most U.S. homes and can be a financial burden. Upgrading to energy-efficient features can reduce energy costs and help to preserve affordability of homeownership, especially in underserved markets where homes are older and in need of these upgrades. But, financing these improvements is also a challenge for homeowners in these markets. Under Duty to Serve, we're developing new mortgage products and enhancing current ones to make financing these energy renovations easier.

Here's how we're supporting energy efficiency improvements:

  • Conducting research on the impact of energy efficiency improvements on property values and loan mortgage performance and publish our research findings in 2019.
  • Developing valuation guidance and data collection mechanisms to account for energy-efficient features.
  • Designing new or improved product flexibilities.
  • Purchasing mortgages on properties with energy efficiency features.
  • Allowing lenders to use energy efficiency to compensate for higher debt-to-income ratios.
  • Permitting cash-out refinance transactions that allow borrowers to:
    • make energy efficiency improvements.
    • pay off existing debt obligations related to energy efficiency improvements.
    • pay off property assessed clean energy (PACE) loans.