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   ARTICLE   |   From Scotsman Guide Residential Edition   |   April 2019

Corner the Market on Green Loans

Becoming the expert on energy-efficient mortgages in your area will help you close more loans

Have you ever funded an energy-efficient mortgage? There are benefits to learning about and promoting these green programs, especially for homebuyers who are looking to purchase an older property that needs some improvements.

The energy-efficient mortgage is a great loan option offered by Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA) and the U.S. Department of Veterans Affairs (VA). These programs may have advantages over other green-financing options such as Property Assessed Clean Energy (PACE) programs.

Expanding your mix of energy-efficient mortgage offerings can boost your monthly closings. These products can keep leads coming in for both the purchase and refinance markets.

Delve into details

The first step is to make sure your company offers these types of loan programs. If they do, great. Grab your company’s underwriting guidelines, and read and understand them as you would with any other program.

Another good option is to connect with the underwriters assigned to review this type of file, so you can pick their brains on how to properly originate and package an energy-efficient loan to ensure fundability.

Each loan product (FHA, VA, Fannie Mae’s HomeStyle Energy and Freddie Mac’s GreenCHOICE mortgages) have similar but different allowed improvements. These can include energy- and water-efficiency upgrades. Take care when promoting FHA loans, for example, so you are not promoting VA-approved improvements.

Share your wisdom

Once you are comfortable with a particular energy-efficient mortgage, start promoting your newfound knowledge via social media sites including YouTube, LinkedIn and Facebook, and market the programs through e-mail and texts to your customer and partner database. Most importantly, make phone calls to your listing agents.

Create an informative educational video on how the energy-efficiency loan program works, then upload it to your social media sites. Text the YouTube link to real estate partners and encourage them to watch, comment, like and share.

Send an e-mail to your database of potential buyers who are actively searching for a home, as well as the buyers you previously helped to land a loan. In addition, e-mail that YouTube link to this database. Energy-efficient mortgages can help clients with their utility bills, increase their home’s value and improve the marketability of the property when it is time to sell. Make sure they understand this through your e-mail and video.

To add more real estate agents to your database, connect with the agents who have an older-home listing who could attract buyers with an energy-efficient mortgage. Do your research before calling the real estate agent so as not to sound like a salesperson.

Visit Zillow or Realtor.com and select the areas in your local market with older homes. In the filter section, add properties that are older than 20 years or so, then select the purchase amount close to your county’s conforming-loan limit to accommodate the energy-efficient mortgage. Once you have a list of those homes, start reviewing the pictures and see what kind of energy-related improvements the property could use. Make a special note of how long the property has been listed for sale so you can mention that to the listing agent.

Call, text and e-mail those listing agents to let them know you have the perfect loan program for them. You can tell those agents that your program will help attract buyers who may be interested in a particular home once they replace, for example, outdated windows or sliding doors, or install an energy-efficient water heater, air-conditioning unit or an up-to-date furnace.

A green niche

With a tightening purchase market, originators who specialize in these energy-efficient mortgages will have an alternative lending program to entice buyers looking for older properties. Originators can always educate buyers and real estate agents about the benefits of these programs.

There are mortgage originators who have carved out their niche by specializing in FHA 203(k) home-renovation loans, downpayment assistance loans or jumbo home-loan products. Offer something different and carve out your niche as the energy-efficient mortgage specialist. The energy-efficient mortgage also can be combined with the FHA 203(k) program. Explore how you can couple those together.

The energy-efficient mortgage is not as difficult as you may think. Jump on this train and you will enjoy the ride once you have closed your first energy-efficient loan.


 


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