• Turn-Key Solutions
• Who Qualifies?
• Home Energy Rating Systems (HERS)

• Energy-Efficient Mortgage
• U.S. Department of Veterans Affairs
• Texas Veterans Land Board (TLVB)
• Prior to Listing
• Prior to Sales
• Realtors EEM / EEL Q&A

• HERS Rater/Provider
• Lender · Escrow Company
• Lender • Contractor • Inspector

As a Real Estate professional you should be aware that TexEnergy provides Turn-Key Solutions to homebuyers interested in knowing more about the problems that they are about to purchase and sellers who would like to market the energy efficiency of their home.

We offer expedited service for Texas Veteran Land Board New home ENERGY STAR certification.

All buyers or owners who can qualify for any FHA or VA home loans are automatically eligible for the FHA or VA Energy Efficient Mortgage Option. In almost all cases there is no additional down payment and the installed energy improvements will eventually produce a Positive-Cash-Flow. A HERS report is needed to qualify for energy efficient financing.

• Thermal envelope (structure, insulation and air flow)
• Window quality and quantity
• Heating, ventilating, and air conditioning systems
• Appliances
• Geographical location and home orientation
• Fuel types and utility rates

• Rate the house (as it is) and estimate its total energy use and costs.
• Recommend specific cost-effective energy upgrades.
• Provide detailed information about the costs, "payback periods" and expected lifetimes of the recommendations.
• Re-rate the home based upon the recommendations and recalculate total energy use and costs.

Table 1. This scale, developed by the National Home Energy Rating Systems Council, is based on the U.S. Department of Energy's national voluntary guidelines for HERS uniformity. For rating purposes, a subject home is compared to a "reference home," which scores 80 points on a 100-point scale with a rating of four stars. Every 5% decrease in the annual energy costs between the subject home and the reference home increases the subject's home score by 1 point from 80 points. Meanwhile, every 5% increase reduces the score by 1 point from 80 points. Note: your state may use a different HERS and scale.

Source: National Home Energy & Resources Organization, Inc.*Mbtu= 1,000,000 Btu

Table 2. Based on the HERS scale in Table 1 (above), this brand new, energy-efficient, 3,585 square-foot home in Houston, Texas, received a score of 89 points and five stars. The home features double-glazed windows, a 40-gallon natural gas water heater, a natural gas central air furnace, and an electric central air conditioner. A programmable thermostat controls the furnace and air conditioner.

Source: National Home Energy & Resources Organization, Inc.*Mbtu= 1,000,000 Btu

Table 3. Based on the HERS scale in Table 1 (above), this 1,475 square-foot home in Tulsa, Oklahoma, received a score of only 21 points and one star. The home has single-paned windows, a 40-gallon natural gas water heater, natural gas central furnace, and an electric central air conditioner. A manual thermostat controls the furnace and the air conditioner. Equivalent carbon-dioxide emissions of 31.01 tons per year.

Source: National Home Energy & Resources Organization, Inc.*Mbtu= 1,000,000 Btu

Table 4. The homeowner will save more than 50% annually in energy costs if recommended energy-effiecient improvements are made to the house in Table 3 (above). These improvements include sealing heating and cooling ducts, caulking, weatherstripping, installing a more energy-efficient central cooling system (10 SEER), installing more insulation in the crawlspace/basement and in the ceiling, and insulating hot water pipes. Payback for the improvements is estimated at a little more than 4 years. Equivalent carbon-dioxide emissions of 10.88 tons per year.

Fannie Mae encourages lenders to offer its EEM by providing incentives and specific criteria for those that it's willing to purchase from lenders. Both existing and new homes fall under this EEM. Several approved home energy rating methods and programs, not just a HERS, are allowed to evaluate a home's energy efficiency. For existing homes, the cost of improvements is limited to 15 percent of its total cost. There is no limit imposed on the cost of improvements for new construction. A homebuyer can finance 100 percent of the energy efficiency improvements without increasing the down payment.

The new program requirements state that the home must be ENERGY STAR to qualify. The Texas Veterans Land Board (TVLB) will purchase the tract of land in which you are interested directly from the seller. The TVLB then resells the land to you by a 30-year contract of sale. It takes approximately 90 days to close a loan, provided all-necessary documentation is submitted timely and there are no unusual situations associated with the purchase.

When the terms of the contract are fulfilled, the TVLB will issue a deed to the property to you. The Texas Veterans Land Program is self-supportive, funded by bonds and the fees submitted by each Veteran purchaser.

The Veterans Housing Assistance Program (VHAP) will provide financing up to $150,000 toward the purchase of a home to qualified Texas Veterans. The term of the loan can be 15, 20, 25, or 30 years. There is no maximum sales price restriction with the VHAP; however, the Board can only invest $150,000 toward the purchase of the home.

Much of the resale housing stock consists of homes built over 20 years ago, when energy usage was not a major concern. Since many of these older homes are less that efficient; lack insulation, have non-efficient heating and cooling systems, have substandard water heating systems, and possess poor quality windows by today's standards, they are prime candidates for energy-efficient upgrades!

Why not turn these deficiencies into assets? By ordering a HERS Report, and obtaining a list of energy-efficiency recommendations, a real estate agent can point out to potential buyers that by obtaining an Energy Efficient Mortgage (EEM), these deficiencies will simply vanish!For a seller paid HERS Report, agents order the report through their favorite lender, or go directly to an approved Rater like TexEnergy Solutions.

• With a HERS Report already in existence, it is easy for the agent to point out to potential homebuyers the amount of money they'll save each and every month on utility bills and, at the same time, enjoy the comfort of living in a more energy-efficient home.
  
  
• Without a HERS Report the agent should suggest to the potential buyer that they order the report so that they may qualify for an EEM loan own a more comfortable home.As a marketing tool, agents may consider creating specialized riders or other signage advertising the EEM availability.

Realtor, desiring to increase their sales and professionalism, must learn all of the details of the EEM / EEL loan programs and be able to interpret the HERS Report. Armed with this information, they should now proceed to share this information with potential homebuyers and loan officers. In the counseling process, that professional realtors need to provide, the following questions and answers should prove helpful:

1. EEM Rater is contacted and a HERS Report is ordered. (Report may be ordered by any party)
   
   
2. Rater completes data sheet and delivers to HERS Provider
   
   
3. HERS Provider issues Energy Efficiency Mortgage (EEM) Report.
   
   
4. HERS Provider (if required by lender) consults with the buyer to determine which of the energy improvements are to be completed and by whom.Lender · Escrow Company

1. Lender analyzes upgrade recommendations, and qualifies the buyer using the EEM loan benefits.
   
   
2. Lender processes the loan request, includes the allowable improvement costs into the mortgage.
   
   
3. Escrow prepares an Escrow Account Agreement
   
   
4. Lender funds the loan and places the upgrade funds into the designated escrow account.
   
   
5. Escrow closes, commissions are paid, seller moves out, and the buyer moves in.Lender - Contractor - Inspector

1. Lender (or Facilitator) and buyer contact selected Contractor(s).
   
   
2. Contractor's bids are finalized and Contractor completes energy upgrades (within 90 to 180 days, depending on loan program).
   
   
3. Lender selects an Inspector (or in conventional cases, the original appraiser) to inspect the energy improvement work, and issue a Certification of Completion.
   
   
4. Lender authorizes escrow to release money owed to the Contractor and Facilitator.
   
   
5. 14. Lender submits the Certification of Completion, and notice that the escrow account has been closed, to its secondary market investor (FNMA, FHLMC, or GNMA) and/or its insuring agency (PHA, VA, or GEMIC).
   
   
6. Lender closes loan file, as a result the buyer saves money and lives more comfortably

An Energy Audit can be FREE, when your customers take advantage of our offer. If you choose, we would be delighted to manage any home improvements that we recommend. For more information on your project management option, please see out Turn-Key Solutions webpage. All costs of your home energy audit may be credited towards future purchases utilizing TexEnergy Turn-Key Solutions.