By: Jim Wasserman
August 24, 2010
In a first of its kind in California, the Sacramento Association of Realtors will give qualified homebuyers $2,000 in cash to help make energy-efficient improvements.
Realtors say they aim to combat a reluctance to buy energy-guzzling older homes. With nearly 60 percent of Sacramento-area housing built before 1979, many buyers fret over replacing aging rooftop air conditioning systems or having to pay higher energy bills in drafty older dwellings, agents say.
"It's a chance for Realtors to position themselves at the front of the green movement," said Charlene Singley, past president of SAR.
The nonprofit Neighborworks Homeownership Center of Sacramento will administer the $234,000 fund. Officials said SAR put up $184,000 and received $50,000 more from the California Association of Realtors.
"We want to help buyers who need it the most and improve houses that need it the most," said Singley, a Lyon Real Estate agent in Sacramento. "This is a first-time thing."
To qualify, buyers must purchase a home built in 1978 or earlier. That includes many older bank repos that have become a large share of the region's for-sale listings. Buyers can spend the $2,000 on the home's closing costs, energy upgrades or as a way to lower the amount financed for energy improvements.
"There are very few pre-1978 houses that would not benefit in some way from this," said Kevin Nunn, senior loan consultant with Sacramento-based Comstock Mortgage, who created the grant program for SAR.
Buyers must use a SAR Realtor or lender. But the homes can be located anywhere.
Buyers must also use a Federal Housing Administration or Veterans Administration Energy Efficient Mortgage. Those mortgages, in use since the early 1990s, allow buyers to roll costs of energy-efficiency improvements into their home loans. Nunn said Sacramento is one of the leading U.S. regions to use them.
The idea behind an energy-efficient mortgage is to save buyers more in the long run on heating/cooling bills than in financing costs.
Nunn said energy-efficient mortgages allow buyers to borrow up to 5 percent of the sales price - $10,000 on a $200,000 house, for example. Buyers most commonly use the money to install air-conditioning systems, add dual-pane windows or put in extra insulation on an older house.
The loans, though not widely known, "basically make homes more energy-efficient, more affordable and, for the homeowner, more comfortable," said Nunn. "It cuts down on the chance they will have a major expense come up that they won't be able to deal with." Nunn said Energy Efficient Mortgages are also available for people who refinance.
The SAR program requires that a SMUD-certified contractor do the work.
Neighborworks Executive Director Pam Canada said real estate agents and loan officers will guide buyers through the process of obtaining energy efficiency loans and SAR grants.
Neighborworks' role will be to "process the money and wire it to the title company."