Time is Now to Make Efficiency Financing Work

Yesterday I had the honor to sit in on a high-energy meeting about making energy efficiency financing more broadly appealing and effective.  The FHA Green MLS Roundtable was one of three activities on Thursday to advance President Obama’s Climate Action Plan.

For me, the best part was sitting with some true rock stars of efficiency financing.  I’ve studied the legendary Kevin Nunn in California from afar!  He understands what makes home buyers tick and has crafted just the right way to position an Energy Efficiency Mortgage, and he’s invented a streamlined process to get to closing quickly and without any drama.  (His secret…besides a super-engineered process?  The pitch is doesn’t start with efficiency – but about protecting your home purchase against the most stressful and catastrophic failure a home owner has to plan for – the day the heat or air conditioning goes out!  Then he explains another bonus and positions the required HERS inspection exactly for what it is – buyer protection from a neutral expert that any upgrades are a wise investment.)  

In Pennsylvania and other markets around the country Peter Krajsa at AFC First has similarly figured out how to position the PowerSaver loan so that consumers who want to make efficiency improvements without refinancing are signing up to participate.

When talking about products like these as well as 203K Rehab loans, I was pleasantly surprised by the consistent feedback that came from each of three breakout groups.  The message was that these products work and stars like Kevin and Peter are finding an eager market.  But, there are lots of small and silly obstacles that prevent others from following in their footsteps.  Each of the three groups independently came up with just about the same list of short-term action steps that would dramatically increase the appeal of these loan products and drive volume.

The group also had some discussion about what happens to these homes after the loan paperwork is signed, namely how appraisal and underwriting for these homes could be streamlined and improved.  This is a key thing to figure out.  We can’t improve the product on the front-end and then shackle the value of the improvements consumers are then motivated to make.  Limitations on what appraisers can do and what underwriters will accept is creating that exact shackle today.  CNT Energy’s Value for High-Performance Homes campaign (which I manage) is all about creating a smooth sales transaction from the minute an upgraded is listed for sale through underwriting to closing.

The uniformity and simplicity of the feedback yesterday to me says loud and clear that the roundtable was much-needed and well overdue.  It also signals some innovations and improvements that are achievable in the short-term.

I don’t like to set goals and not achieve them.  My 2012 goal is still hanging out there – to close my first EEM sale.  I had written it off.  But now I’m feeling really optimistic that I’ll actually be able to deliver this year!


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