Owners of ENERGY STAR-certified homes are 32 percent less likely to default on their mortgage, and as the Home Energy Rating System (HERS) index of efficiency of the home goes up, the risk of default goes down, according to a new University of North Carolina at Chapel Hill study. The study compared a sample of 71,000 homes from 38 states and the District of Columbia purchased between 2002 and 2012 with an average sales price of $220,000. Nearly one-third of the homes were ENERGY STAR-rated homes. About 15 percent of the cost of home ownership is spent on energy, with rural households spending an average of $400 more a year than urban households. When those costs are lowered, the savings realized help homeowners make mortgage payments. “Consumer and industry acceptance of energy efficiency is high,” says study author Roberto G. Querica. “But the lack of broad consideration of potential energy savings in the mortgage underwriting process still prevents many moderate- and middle-income home buyers form fully enjoying the cost savings.” The study is the first national effort to examine the links between home energy efficiency and mortgage risks. “Since our study findings now show that energy efficiency is strongly and consistently associated with lower mortgage lending risk, lenders and policymakers have one more reason to promote it,” Querica says. | Read More