According to a new study, energy efficient buildings are less likely to default on mortgages compared to commercial buildings that have higher energy consumption.
Energy management not only brings significant annual savings, but now it is also impacting mortgage rates and loan process.
Lawrence Berkley National Laboratory based its findings on mortgage default rates and energy performance in six major cities from 2000-2012.
Due to energy data and benchmarking data being more readily available, it is becoming easier for appraisers and underwriters to include energy intensity and costs in the evaluation process.
Typically, energy expenses make up 30% of operating costs
Such findings could impact mortgage interest rates or energy disclosure requirements regarding new loans.
Energy efficiency has been increasing among commercial buildings, especially since the formation of PACE (Property Assessed Clean Energy).
PACE offers property owners long-term loans that will allow for energy upgrades that can be repaid through property tax bills.
This financing will cover the full cost of the project and will allow for immediate cash flow.
Currently, PACE is financing as much as $450 million in projects in US.
PACE programs are launched and operating in 19 states.
Such financing programs make it easy and affordable to become energy efficient all while growing the business’ bottom line and increasing the value of the building.