Monday, October 17, 2011

New Appraisers’ Tool Helps Homeowners Get Credit for Green Features

By Michelle A. Winters,
Senior Manager, Green Strategies
NeighborWorks America
Homeowners who have invested in energy saving upgrades can now have greater confidence that their property will be appraised at a fairer market value.

The nation’s largest professional association of real estate appraisers released a form recently that is intended to help appraisers identify and describe a home’s green features, from solar panels to energy-saving appliances. The Appraisal Institute says the Residential Green and Energy Efficient Addendum is the first of its kind. It will help the industry standardize the way residential energy-efficient features are analyzed and reported.

The form was issued as an optional addendum to Fannie Mae Form 1004, the appraisal industry’s most widely used form for mortgage lending purposes. Used by Fannie Mae, Freddie Mac and the Federal Housing Administration, Form 1004 is completed by appraisers to uphold safe and sound lending. Currently, the value of a home’s green features is rarely part of the equation.

The Appraisal Institute encourages use of the form not just by appraisers, but also by lenders, homebuilders, real estate agents and the homeowners themselves. Lenders can request that the form is included with Form 1004 or provide it to homeowners to fill out and give to appraisers. Real estate agents can use the data to help populate the multiple listing service (MLS). Key stakeholders in the homebuying process can all take advantage of this new tool.

NeighborWorks America has done work with the Appraisal Institute in the past. In 2010, NeighborWorks partnered with the Appraisal Institute, the US Green Building Council and others to help the National Association of Realtors® develop a Green MLS Toolkit. The tool kit was created to help Realtors® add green fields to their local multiple listing service, so that it is easier to market and identify green homes for homebuyers and sellers.

The Appraisal Institute’s latest tool can be downloaded here.