Bill Overview
Title: GREEN Appraisals Act of 2022
Description: This bill requires lenders that originate federally backed residential mortgages to notify borrowers of their right to request an energy report concerning the property. The bill also requires, upon consent of the borrower, the lender to provide to an appraiser any available energy report concerning the property. The appraiser must take this report into consideration when appraising the value of the property.
Sponsors: Sen. Bennet, Michael F. [D-CO]
Target Audience
Population: Homeowners with Federally Backed Mortgages
Estimated Size: 25600000
- The bill affects borrowers of residential mortgage loans who may have federally backed mortgages. In the US, many mortgages are federally backed through entities like Fannie Mae, Freddie Mac, and the FHA.
- Energy efficiency assessments may impact property values, which in turn affect homeowners' equity and refinancing options.
- Homeowners who are informed of their right to request an energy report may decide to make energy-efficient upgrades, incentivized by the potential for increased property value.
- Appraisers are also impacted as they must learn to integrate energy assessments into their appraisal process.
Reasoning
- Given the scope of the policy, it directly impacts homeowners with federally backed mortgages who may be motivated to obtain an energy report for their property. The cost associated with the policy will largely involve administrative processes to enable lenders to notify borrowers and possibly guide appraisers.
- The budgetary constraints imply that a significant portion of the funds must be allocated to setup costs for notification systems, training appraisers, and potentially subsidizing some energy reports to kickstart the process.
- The target population is homeowners with federally backed mortgages, estimated to be around 25.6 million. Within this group, the most impacted will be those who live in energy-inefficient homes.
- Further considerations include appraisers needing to adjust to new requirements, which might initially cause some disruption or slow down mortgage processes.
Simulated Interviews
IT Manager (Austin, TX)
Age: 36 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- I'm all for anything that can potentially increase my home's value. Having the option to get an energy report seems beneficial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Auto manufacturing worker (Detroit, MI)
Age: 52 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- I think it can help me understand more about what improvements could be beneficial long term.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Civil Engineer (San Francisco, CA)
Age: 29 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Considering my investment in green technologies, this policy could work well to my advantage if it appreciates my property value.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 10 | 8 |
| Year 20 | 9 | 8 |
Freelance Graphic Designer (Raleigh, NC)
Age: 44 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- It's a great initiative, but I'm worried about the additional costs and time that may come with the process.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Retired (Miami, FL)
Age: 61 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 2.0 years
Commonness: 16/20
Statement of Opinion:
- Anything that could help manage costs in retirement sounds good, provided it doesn't add extra burdens.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 4 | 4 |
| Year 10 | 4 | 4 |
| Year 20 | 4 | 4 |
Teacher (Chicago, IL)
Age: 39 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- It's a thoughtful approach to make greener choices and potentially increase my property’s worth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 9 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 10 | 7 |
| Year 20 | 9 | 7 |
Nurse (Phoenix, AZ)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 11/20
Statement of Opinion:
- Integrating energy reports can help me better assess property values for future purchases.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Startup Founder (New York City, NY)
Age: 26 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- The potential to increase property value aligns well with my interest in sustaining a green lifestyle.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Environmental Scientist (Seattle, WA)
Age: 33 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- I'm optimistic it could draw more investments into sustainable homes, thereby supporting community efforts.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 10 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Retired Financial Advisor (Dallas, TX)
Age: 70 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 13/20
Statement of Opinion:
- I see the financial sense in this, but policies need to ensure simplicity and accessibility for older adults.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Cost Estimates
Year 1: $40000000 (Low: $35000000, High: $45000000)
Year 2: $40000000 (Low: $35000000, High: $45000000)
Year 3: $40000000 (Low: $35000000, High: $45000000)
Year 5: $40000000 (Low: $35000000, High: $45000000)
Year 10: $40000000 (Low: $35000000, High: $45000000)
Year 100: $40000000 (Low: $35000000, High: $45000000)
Key Considerations
- Approximately 25.6 million owner-occupied homes in the US could be eligible.
- Training for appraisers will need to be distributed efficiently to accommodate new valuation practices.
- Cost burden distribution between borrowers and lenders for energy reports will influence the financial outcome.