Energy Efficient Mortgages Reduce Your Monthly Housing Expenses

When a lender figures the monthly mortgage amount that a buyer can afford whether it’s a purchase or a refinance, the amount is calculated to include principle, interest, taxes and insurance or PITI.  But there’s another cost that is beginning to be taken into consideration—utilities.  If you buy an older home with old single pane windows, old appliances, an old furnace, poor insulation, etc., the monthly cost to own the home can increase dramatically.  If you don’t have the money to replace some of these items immediately you could spend hundreds of dollars more each month on energy   costs.  And if you decide to make some of the improvements or buy appliances on your credit card that just adds to your debt at pretty high interest rates.

But the FHA 203(b) loan, or Energy Efficient Mortgage (EEM) Program can help buyers and refinancers to make their homes more energy efficient and save a considerable amount on their monthly utility bills.  “The EEM Program recognizes that the improved energy efficiency of a house can increase its affordability by reducing operating costs.  Because the home is more energy efficient, the occupants will save money on utility costs” and significantly reduce the amount of money needed each month to operate the home. So here’s how it works.  When you take out an FHA 203 (b) loan you can add up to $8,000 to the loan amount even if it goes over the FHA maximum loan amount or over what you qualify for.  This additional amount is at the same rate as the original loan.  So if you lock in at say, 4.25%.  The additional amount is rolled right into the loan at the same rate. Here are some of the things you can do to improve your home’s value and energy efficiency: New windows, insulation, passive or active solar improvements, heating and air conditioning systems, appliances.  Now needless to say $8,000 won’t cover all these things.  So the borrowers needs to determine what things they want to do and how much it will cost.

Prior to settlement the borrower submits a home improvement energy package and the costs to the lender.  Then a HERS  (Home Energy Rating System) energy rater has to inspect the property to determine whether the cost savings over the life of the loan will be greater than the loan amount.  The buyer, seller, lender or agent can pay for the cost for the inspection.  Once the rating assessment has been done and a satisfactory rating has been determined, the lender can escrow the amount of money in the proposal.  All work must be completed within 90 days. Most lenders don’t even know about this loan or if they do they don’t offer it.  Don’t ask me why.  So I was very happy when I found a wonderful loan officer at PMG Mortgage who made it his business to research the loan and convince his company to offer it to borrowers. Vince Coyle  is ready and willing to work with borrowers on this loan product.

Given the low interest rates right now this loan is an excellent way to get a lot more bang for your energy efficiency buck.  Plus, after you make some of these improvements most states have some tax credits and incentives that you might be eligible for.  Here are the federal tax credits that are available now.



Gayle Fleming


My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.

Passive Houses Use 90% Less Energy —Really?

Yes, really.  You think the oil, coal, natural gas and HVAC companies want you to know about this. NOT.  The Passive House movement is in its infancy in the US but it’s already a young adult in Europe.  It’s called “passive” because heating or cooling these homes relies completely on natural resources.  In other words there are no active systems involved in the 90% reduction in energy use!  How is this possible I’m sure you want to know.  Why didn’t I know about this might be another question.

A passive house uses orientation, super insulation, advanced window technology, air tightness, and shading to achieve standards that are set by the Passiv Haus Institute. These standards eliminate the need for a conventional HVAC system or for solar panels and geothermal systems.  Although some homes have an option for solar systems.  An energy recovery ventilation system provides a constant, balanced fresh air supply, a uniquely terrific indoor air quality, AND reduces energy use and carbon emissions, according to the Passive House Institute US (PHIUS)

Do passive houses cost more to build?  Yep.  David Peabody, a Washington metro area architect and passionate promoter of sustainable architecture and passive houses is building a passive house in Bethesda, Maryland.  He found that the increased cost for the home he’s building is about 8%.  For a 90% reduction in monthly energy bills I’d say it’s worth it.  A certified passive house uses less than 1.4 kWh per square foot in heating and cooling energy and uses less than 11kWh per square foot for all energy!  By the way,  existing homes can be retrofitted to meet many passive home standards.

Barbara Landau and her family are building a second home in Vermont.  A Passive House–in Vermont–with no furnace.  When several insurance companies asked what kind of heating system the house would have and were told NONE, they declined to insure the house, thinking the pipes would freeze.  They won’t.  This excellent NY Times article chronicles their story.

The passive house movement was started when conversations between two German professors at the Institute of Housing and the Environment led to the first passive houses being built in Germany in 1990. To date it is estimated that 15 to 20 thousand passive buildings have been built worldwide, mostly in Germany and Scandinavian countries.  The US numbers are far, far fewer.  Remember, the movement here is still a nursing baby, but one that is being nurtured by it’s German parent.

This map represents the Passive projects currently underway in the United States today.  The squares have been certified, the circles pre-certified and the triangles are in the planning stages.  Green represents single family homes, red  education, blue multi-family and gold are retrofits.

Buildings use more than 40 percent of all the energy consumed in the United States.  If builders were to embrace the passive building concept, both the cost of building and the use of nonrenewable energy sources would decline.


If It’s a “Green” Home, Can I Afford It–And What is a “Green” Home Anyway?

So you’re thinking about buying a green home. What does that mean, actually?  Does it mean buying a really big expensive home with “green” features?  Does it mean buying a really small home with a tiny ecological footprint?  Does it mean solar panels and a wind turbine in your back yard?   Does it mean you’re being a hypocrite if you don’t use rainwater barrels and stop driving your car?  Does it mean spending a lot more money than you ever would for a regular house?  “Forget it.  I’ll just buy a regular house.  It’s all to complicated, expensive and politically correct for me to figure out,” you might decide.

Or, you decide to sell your home that needs some work to get it on the market anyway.  So you decide to do all green upgrades.  Well, what does that mean exactly?  Do you have to replace your 5-year-old hot water heater with a tankless one?  Do you have to install all new windows that are triple paned and very expensive? Do you need to replace your oh, so ordinary hardwood floors, with bamboo?  Do you have to invest in solar panels to say your house is energy efficient? Will you recoup the investment?  “You know what, I’m just going to do the old standard stuff—paint, carpet, replace a couple of appliances and be done with it,” you might think.

NO, NO, NO and more NOs to all of these questions.  The myths about what a green home is, and how much it costs are many.  So I’m going to tackle some of the myths in my next few blogs and suggest some articles along the way.

The biggest myth is that buying a green home means buying a home that is many, many thousands of dollars more expensive than a regular home.  ­­First, there are nuances to what a green home actually is and that, in and of itself, is confusing.  Unfortunately green can be in the eye of the beholder.  Most new homes calling themselves green really just have some green features.  Until there are nationally agreed upon standards, what’s green will remain open to interpretation.

Buying a home with better insulation, a more tightly sealed envelope and EnergyStar rated appliances, HVAC systems and windows, does usually add a modest premium to the cost of the home.  But what is ultimately saved in energy costs and energy use, more than makes up for the additional premium.  But these are green features and do not give the builder the right to call the home a green home.  In fact, some new evidence is showing that homes that are tightly sealed but that still have VOC (volatile organic compounds) in cabinets,  carpet sealants, hardwood floor finishes, paint, etc—may be causing damage to the health of the home’s inhabitants!

There are some really great reasons to consider using sustainable standards when you buy or sell a home.  So, the bottom line is—buy or sell your home with an expert—someone who can guide you, advocate for you and protect you from greenwashing.  That would be ME–your EcoBroker certified, NAR Green designated Realtor.



Gayle Fleming


My purpose is to serve my clients and advocate for their highest and best good, so they attain their real estate goals.

What Is Green Residential Real Estate and What is a Green Realtor

You’re certainly not a tree hugger. But you have been thinking a lot more lately about energy costs, and you were taught the old addage of waste not want not as a child. Recently you’ve kind of bought into the idea that resources may be more finite than you  previously thought, and global climate change just might not be a lefty conspiracy to deny you your God given right to consume.  You may be thinking about buying a home or  making some upgrades to a home you live in or may be selling.  This could be an opportunity to put some of your new ideas about your carbon footprint into practice.

But like any new fad, navigating the world of “green” hype, spin and downright misconceptions, and distinguishing them from really useful planet sustaining choices might prove difficult and frustrating.  So just what is “green” real estate and what should your real estate agent know about it?  How will you know that a choice you may make that costs more now, will pay off in saving money over time–and how much time?

Here is the US Green Building Council’s Green Home Guide definition of a green home: A green home incorporates smart design, technology, construction and maintenance elements to significantly lessen the negative impact of the home on the environment and improve the health of the people who live inside. No matter your location or living situation, the opportunities for living a greener life at home are limited only by your imagination.

Let me give you a couple of examples of what a green home isn’t. A home with poor insulation, leaky casement windows that has all new Energy Star rated appliances cannot be called green.  A home that has new Energy Star rated windows but that has a twenty year old refrigerator, furnace and A/C unit is not a green home.

But if you are buying or selling an existing home that has all new energy efficient appliances or windows these are excellent features, and should definitely be highlighted by the listing agent in the marketing materials.  A buyers agent should be on the look out for environmentally sustainable features in any existing home that she shows you.

There are currently two designations for real estate agents to be certified as knowlegeble in listing or selling real estate with a focus on sustainability. The EcoBroker Certified designation is the one that I consider the most comprehensive both in terms of the scope of the training and the learning materials.  The National Association of Realtors rolled out their Green Designation last November. I think eventually the training may evolve to be as comprehensive as the EcoBroker training.

There are agents who are calling themselves “green” Realtors who have no certifications. But there are agents with certifications who are just not  “walking the walk”; and their knowledge is sketchy when it comes to serving clients looking to make a signifcant lifesytle change in the purchase or sale of real estate .  As a consumer you should know what questions to ask an agent if sustainability is important to you. Here are a few examples:

1. How can you help me to sell my home once I have made upgrades to make the it more desirable and sustainable?

2. Can you help me to know what features in a home I’m considering buying are energy efficient or sustainable?

3. Will you be able to make suggestions to me about sustainable improvements that I might make once I move into my home?

4. Do you have green vendors that you can recommend?

5. Should I have an energy audit? (Yes)

Hint: A Realtor driving a gas guzzling SUV is probably not “walking the walk” no matter what “green” designation she  has.

It is true that some green upgrades such as high energy efficient furnaces or A/C units cost more initially than their less energy efficient counterparts.  But the longterm savings if you live in the home or getting  a higher sales price  if you you make sustainable improvements far outweigh the potential additional expense. This DOE website will give you a good idea of cost versus savings.

Tom Zeller of the NY Times writes a great blog on greening his sixty year old home.




What Makes a House Planet Friendly?

As everyone tries to jump on the “green” bandwagon it’s getting more and more difficult to figure out what is green.  As I wrote in a previous post, greenwashing abounds throughout the environmental and sustainability movement. So how does a home qualify as being “green”?  Are there certifications or standards to which a home must adhere?  Can an older home be retrofitted to have features that are considered environmentally positive.  In this post we’ll look at three homes and see why each of them can claim features that are planet friendly.

When a new home is built the builder can decide as Patty Shields did, to build the greenest home possible.  The Metro Green Home in Arlington, Virginia is the first home in the state certified by the US Green Building Council (USGBC) with the Leadership in Energy and Environmental Design (LEED) Platinum designation, the very highest possible. LEED for Homes is a nationally recognized third party certification system whose rigorous process has become the primary standard by which homes are rated.  The Metro Green Home features geothermal heating and cooling, supplemental solar heating and hot water and exceeds all Energy Star standards.  The annual heating and cooling bills are  projected to be less than $500 for the whole year making it a net zero energy house . The home’s building materials are pre-cut, sorted and recycled so that less tan 20% of the construction waste goes landfill.  The house was oriented for maximum natural light and passive heating.  These are just a few of the features that make the Metro Green Home an example of the greenest of the green. Click on the the link above to learn more about this

In DC a 1925 row house has was lovingly restored by the owner with the intention of “conserving natural resources and creating a healthy space”.  The owner  restored the home’s original heartwood pine floors, thus both reducing waste and retaining natural beauty.  All the appliances and the windows are Energy Star rated. The paint, sealants and adhesives used in the renovation are all low in volatile organic compounds.  (VOCs) The bathrooms were renovated with low flow shower heads  and the home has outdoor rain barrels to conserve water. In addition to saving energy with windows and appliances, the home will save even more energy because of the recycled denim insulation.  A home with a high walk score automatically gets planet friendly points because walking to shop, run errands or catch a bus or subway reduces gasoline dependence.  This home is walking distance to two metros stops as well as shopping, restaurants and entertainment.

Sometimes the only thing on a homeowner’s mind is to sell their home. But say there are improvements that need to be made  to get the home ready to sell. If their real estate agent  is trained to advise them on making planet friendly improvements as well as look for features in the home that are already planet friendly, the home stands a good chance of selling more quickly and for more money even in a down market.  I recently listed a cute cape cod in Arlington. It needed some spiffing up to get it ready to sell.  The house was painted throughout with low VOC paint. The master bedroom was recarpeted with eco-friendly carpet made from recyled plastic bottles (sounds weird but really beautiful). The kitchen and sun room floors were replaced with vibrantly colored marmoleum, a natural flooring that is not made from petrochemicals, but from linseed oil, rosins and wood flour.  The house already had some great energy saving features like six ceiling fans, radiator heat, and double glazed low-E windows.  This home also has a wonderful self-watering vegetable garden–talk about eating locally. It’s walk score is high since it’s walking distance to metro and one of the most popular destinations for socializing. The house, by the way, sold in three days.


When you’re ready to buy or sell a home, call me, your going green real estate advisor.

Gayle Fleming, Keller William Realty            703-625-1358   

Follow me on Twitter@ecogayle


Use the FHA 203K Loan to Rehab Your New Older Home

So you want to buy a home but the only homes you can afford are older and/or need  repairs.  Maybe it’s a foreclosure or short sale that would be a good deal if only you had the extra money to make repairs; put in new appliances, a new furnace or new windows, for example.   The FHA 203K Streamline loan allows a borrower to tack on up to $35,000 (provided they qualify) in order to make improvements to the home.

Currently  the Federal Housing Authority (FHA)  is writing fully 35% of all new mortgage loans. But the 230K Streamline is very under utilized. If a home needs some kitchen or bath updating, a new furnace, A/C, etc, the money  for these improvements can become a part of the mortgage and the improvements can be made  without a buyer going into credit card debt or using personal savings.  The rate for the 203K Streamline is slightly higher than the conventional FHA but much lower than a credit card interest rate and is spread out over the 30 year life of the loan. Here are some of the improvements the loan can be used for:

  • Roofs, gutters and downspouts
  • HVAC systems (heating, venting and air conditioning)*
  • Plumbing and electrical
  • Minor kitchen and bath remodels
  • Flooring: carpet, tile, wood, etc.
  • Interior and exterior painting
  • New windows and doors*
  • Weather stripping & insulation
  • Improvements for persons with disabilities
  • Energy efficient improvements*
  • Stabilizing or removing lead-based paint
  • Decks, patios, porches
  • Basement completion and waterproofing
  • Septic or well systems
  • Purchase of new kitchen appliances or washer / dryer*

Certain improvements can get you a federal tax break. If you make improvements to increase the energy efficiency in your home that meets Dept. of Energy’s Energy Star standards, you can deduct 30% of the cost up to $1500.  The astericked items are some that qualify. 

When you’re ready to buy or sell a home, call me, your going green real estate advisor.

Gayle Fleming, Keller William Realty            703-625-1358   

Follow me on Twitter@ecogayle


First Things First–Seal Your Home

So you buy or already own an older home and have decided to renovate and remodel “green”.  You have visions of a remodeled kitchen and baths–maybe even an addition.  You’re thinking bamboo, no VOC paints, paperstone or recycled glass countertops, and other cool green products.  But wait–before you get to the hip elective stuff, you have to get a good grade on the boring basics , to use a metaphor.

I was in a home built in the 1950’s the other day that had been nicely remodeled.  The kitchen had been gutted and enlarged. They had added a huge designer bath in the lower level–all nicely done.  But the first thing I noticed was that it was freezing in the house.  The house still had the original single pane windows with broken sashes, cracked and rotted wood frames and no storms!  I didn’t go into the attic, but I’m pretty sure I wouldn’t have found good insulation.

The very first step in greening an existing home is to make it more energy efficient.  It’s another one of those substance over style things.  So the first thing to do is have an energy audit. An energy auditor will tell you where your home is leaking energy and what you need to do to tighten the home up.  There’s nothing you can do that’s more important than stopping the energy waste inherent in an old home.  It’s important to have a trained energy auditor to assess your home so that you spend your dollars wisely. Many of the energy improvements that may be recommended are things you can do yourself.

More than half of all energy used in a home is for space heating and cooling and a lot of that energy escapes through poorly sealed and under insulated attics.  Only 20% of all homes built before 1980 were well insulated. 

Windows are another big source of energy loss but they don’t always have to be replaced.  Sometimes just caulking and sealing around the glass can do wonders.  If you do need windows though, make sure they’re Energy Star rated with low-e glass, multiple panes and gas filled.

Here’s a cool graphic I found on the Dept. of Energy website on what you can do to save energy.

And remember, when you’re ready to by or sell in Northern Virginia, call me your Going Green Real Estate Advisor.

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