What are the financial benefits of energy-efficient homes?

Being a homeowner certainly comes with its own costs, but by investing in sustainability, you can take advantage of lower bills while staying comfortable. Whether you’re searching for a new home or looking for ways to make your home more energy-efficient, there’s a variety of options available, depending on your time and budget. Lower utility bills, boosted home value, tax credits and rebates, insurance discounts, and special cost-saving mortgages are all great incentives to save energy at home.

Shopping for a home? It’s crucial to check whether the home you want is optimized with modern energy-efficient features. It’s not just for aesthetics—it’s for savings.

• If you live in an area prone to extreme seasonal temperatures, you may get better temperature control with an HVAC than with a single air conditioner and furnace.
• Ask if any improvements have been made to the home’s wall and floor insulation, so you won’t need to adjust the temperature as much.
• Keep an eye out for features like double or triple-paned windows for additional insulation benefits.
• Take note of kitchen and laundry appliances; ENERGY STAR appliances save electricity and water.
• Regardless of where you’ll be living, water fixtures with limited flow can bring you valuable savings all year.

Are you a homeowner? You’ll likely see the quickest changes to your energy and water bills year-round by investing in energy-efficient heating and cooling systems, optimizing water efficiency, and choosing modern lighting alternatives.

• If you run your furnace in the winter and blast your air conditioner in the summer, consider investing in an HVAC system, many of which come with energy-saving features.
• Ensure your doors and windows are tightly sealed to maintain temperatures and avoid having to ramp up heating or air conditioning more than needed.
• Invest in insulated water tanks to improve efficiency and temperature control.
• Install motion sensor lighting that only turns on when needed.
• Replace your electric dryers with heat pump-powered ones or even simple drying racks for less energy.
• How’s your landscaping? Consider drought-tolerant plant varieties or succulents if you live somewhere warmer.

These energy-saving updates can even help increase your home’s value. Home updates that improve insulation, ventilation and climate control both help your resale value and provide greater comfort. In California, homes that were upgraded with earth-friendly features sold for an average of 9% higher than homes without such updates. A better resale value has also been observed for energy-efficient homes across the country.

Even a minor adjustment can contribute to greater savings, not only for your utilities but also for your eligibility on policy-related insurance discounts. You may also be eligible for state-sponsored rebates to improve your home’s energy performance or simply get assistance with costs.

Instead of dealing with a separate heater and air conditioner, take advantage of an HVAC system, which combines the two plus ventilation. Most HVAC systems run off electricity, but there’s also a few different kinds, and the installation cost will depend on which you get.

• Duo furnace and air conditioning: These HVACs are powered by air conditioners that run off electricity, and furnaces that vary in their energy source. These are the most common HVAC units in the country.
• Heat pumps: HVACs powered by heat pumps are powered by electricity—which means savings on your gas bill. They move heat around from inside to outside as needed. They’re increasingly popular and great in moderate climates.
• Geothermal heat pumps: Extremely efficient with high upfront costs, geothermal heat pumps are unique and rare in that they draw energy from the earth. They require the least fuel or electricity.

Solar panels may come with installation costs, but that doesn’t make them any less valuable in the long run. If you live in a sun-drenched area, particularly year-round, your future self will thank you for the clean energy you’ve generated, resulting in gas and electricity savings.

Depending on where you live, your state or county may even offer you rebates for getting them installed, greatly reducing costs. Your utility bills could be slashed significantly, and most investments pay off around an average of seven years.

Good news: they still work during the winter, even if it’s snowing or raining. You can use the energy you saved via rechargeable solar batteries. They can even come in handy if there’s a blackout or outage, and you’re lacking a generator.

You may even be eligible for tax credits or other incentives by installing solar power in your home. The investment could very well be worth it.

At Guild, borrowers installing solar panels can access special mortgage financing:

• FHA Solar: Add the solar energy installation cost to your loan when a Photovoltaic (PV) Energy System is installed within 120 days of closing.
• FNMA Solar: Similar to the FHA Solar program, this Conventional loan combines the cost of a PV Energy System with the purchase of a newly constructed home.
• FNMA HomeStyle Energy: Combine additions like smart thermostats, solar, or upgraded windows with a loan. It also helps you refinance existing energy-related home improvement debt and is open to many property types.

Perhaps the simplest, quickest, and most affordable upgrade is to switch out your incandescent bulbs for LED lights.

Incandescent lights are certainly cheaper but have much shorter lifespans; the price won’t matter as much if you’re constantly replacing them in high-use locations. Meanwhile, LED lights emit less heat, allow for dimming and come in variable colors, and can be used for almost anything. They last much longer than incandescent lights.

While lighting accounts for less of a home’s energy use, it still can accumulate savings. You’ll get the best bang for your buck if you update lights throughout the house in as many places as possible. It’s the easiest energy-saving starting point, and much more affordable than the other two major upgrades.

General energy-efficient mortgage programs are available for both purchase and refinance transactions. These solutions exist for FHA, Conventional, and even VA mortgage loans, with special initiatives for down payment assistance depending on where you live.

Here at Guild, we offer:

• FHA Energy-Efficient Mortgage: Finance energy-efficiency improvements with an FHA mortgage to save on bills. A qualified energy package is added to the total loan amount.
• VA Energy-Efficient Mortgage: For VA loans, qualified borrowers can finance up to $6,000 in upgrades for a variety of projects.
• Down payment assistance (DPA) programs: Regional or income-based initiatives, like Hope for Homeownership (HOPER) with eligibility in select states, can help buyers purchase and finance energy-efficient upgrades, including solar.
• The GreenSmart Advantage Program: Combines the cost of ENERGY STAR appliances with the total cost of your loan. You’ll be able to enjoy greener living sooner rather than later, whether you’re a first-time or repeat buyer.

With reduced utility bills, increased home value, tax credits, insurance discounts, unique home financing and a better standard of living, there’s so many reasons to look into making your home more energy-efficient—or to buy a new one! From simple lighting adjustments to major overhauls for heating and air, it’s up to you to decide how you want to go green. Interested in learning more? Get in touch with one of our loan officers to plan your next step.