12 USC 1701z-16 - Energy efficient mortgages pilot program

U.S Code last checked for updates: Nov 22, 2024

§ 1701z–16.

Energy efficient mortgages pilot program

(a)

Establishment of pilot program

(1)

In general

(2)

Pilot program

The pilot program established under this subsection shall include the following criteria, where applicable:

(A)

Origination

(B)

Approval

(C)

Costs of improvements

The cost of cost-effective energy efficiency improvements shall not exceed the greater of—

(i)

5 percent of the property value (not to exceed 5 percent of the limit established under section 203(b)(2)(A)) of the National Housing Act (12 U.S.C. 1709(b)(2)(A); 1

 So in original. There probably should be an additional closing parenthesis.

(ii)

2 percent of the limit established under section 203(b)(2)(B) of such Act [12 U.S.C. 1709(b)(2)(B)].

(D)

Limitation

(3)

Authority for mortgagees

In granting mortgages under the pilot program established pursuant to this subsection, the Secretary shall grant mortgagees the authority—

(A)

to permit the final loan amount to exceed the loan limits established under title II of the National Housing Act [12 U.S.C. 1707 et seq.] by an amount not to exceed 100 percent of the cost of the cost-effective energy efficiency improvements, if the mortgagor’s request to add the cost of such improvements is received by the mortgagee prior to funding of the base loan;

(B)

to hold in escrow all funds provided to the mortgagor to undertake the energy efficiency improvements until the efficiency improvements are actually installed; and

(C)

to transfer or sell the energy efficient mortgage to the appropriate secondary market agency, after the mortgage is issued, but before the energy efficiency improvements are actually installed.

(4)

Promotion of pilot program

The Secretary shall encourage participation in the energy efficient mortgage pilot program by—

(A)

making available information to lending agencies and other appropriate authorities regarding the availability and benefits of energy efficient mortgages;

(B)

requiring mortgagees and designated lending authorities to provide written notice of the availability and benefits of the pilot program to mortgagors applying for financing in those States designated by the Secretary as participating under the pilot program; and

(C)

requiring each applicant for a mortgage insured under title II of the National Housing Act [12 U.S.C. 1707 et seq.] in those States participating under the pilot program to sign a statement that such applicant has been informed of the program requirements and understands the benefits of energy efficient mortgages.

(5)

Training program

(6)

Report

(b)

Expansion of program

(c)

Definitions

For purposes of this section:

(1)

The term “base loan” means any mortgage loan for a residential building eligible for insurance under title II of the National Housing Act [12 U.S.C. 1707 et seq.] or title 38 that does not include the cost of cost-effective energy improvements.

(2)

The term “cost-effective” means, with respect to energy efficiency improvements to a residential building, improvements that result in the total present value cost of the improvements (including any maintenance and repair expenses) being less than the total present value of the energy saved over the useful life of the improvement, when 100 percent of the cost of improvements is added to the base loan. For purposes of this paragraph, savings and cost-effectiveness shall be determined pursuant to a home energy rating report sufficient for purposes of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, or by other technically accurate methods.

(3)

The term “energy efficient mortgage” means a mortgage on a residential building that recognizes the energy savings of a home that has cost-effective energy saving construction or improvements (including solar water heaters, solar-assisted air conditioners and ventilators, super-insulation, and insulating glass and film) and that has the effect of not disqualifying a borrower who, but for the expenditures on energy saving construction or improvements, would otherwise have qualified for a base loan.

(4)

The term “residential building” means any attached or unattached single family residence.

(d)

Rule of construction

(e)

Regulations

(f)

Authorization of appropriations

(Pub. L. 102–486, title I, § 106, Oct. 24, 1992, 106 Stat. 2792; Pub. L. 110–289, div. B, title I, § 2123, July 30, 2008, 122 Stat. 2839.)

cite as: 12 USC 1701z-16