Building a Green Future



Green Home Mortgage
         2009




                     1
Green Building Background




                            2
Definition
What is Green Home Building?
The careful design, construction, operation, and
reuse or removal of the built env...
Definition
What is Green Home Building?
Green homes contain common elements:
Energy efficiency

Indoor air quality

Wat...
Why Green?
U.S. Impact of Buildings On Resources Today
40% of Total Energy Use

71% of Electricity

38% Carbon Dioxide ...
Green Building Principles
    Depending on your location, a green building

    program will follow one or more of these
...
Green Building Principles
    Materials: Durable, low maintenance, recycled,

    renewable and sustainable all come into...
Green Building
    Green Building Certification programs


    LEED for Homes: From the US Green Building

    Council. ...
Green Building Marketplace




                             9
Green Home Marketplace
Green building is not a fad—it’s an industry
trend
                                                ...
Green Home Marketplace
Estimated Size of Green Home Market




                McGraw-Hill Construction Survey Results, 20...
Green Home Building




Green Home Market – Who is Buying
   Average age of 45
   Married couples
   79% college educated
...
Green Home Building




    Green Home Market - Region
                45%
                40%
                           ...
Green Home Building




    Green Home Market – Income Level
                           35%
                           30%...
Green Home Building




Green Home Market – Customer Satisfaction




McGraw-Hill Construction Survey Results, 2006




  ...
Green Home Builders




                      16
Green Home Builders
Who is building green?
Builders with under 10 units per year
• 2005: 35% of builders with at least 15%...
Green Home Builders
Who is building green?
Builders with at least 10 units per year
• 2005: 27% of builders with at least ...
Green Home Builders
Most cited triggers to increased residential
green building
•Energy cost increases
•Publicity benefits...
Green Home Builders
Most cited obstacles to increased residential
green building
•Higher costs
•Consumer willingness to pa...
Green Home Builders
Top reasons to build green homes according
to home builders
                            45%
          ...
The Greening of America




                          22
Corporate Going Green
Green as Part of Corporate Growth Strategy

By 2009, 80% of corporate
                              ...
Corporate Going Green
Fortune 500 Companies
 Chevron Corp., BP and other oil companies are spending billions of
   dollar...
Corporate Going Green
Financial Services Companies
 Citi announced that it will direct $50 billion over the next 10 years...
Recap
 Green   industry expected to grow to $6 billion by
  2010
 59% of large builders have at least 15% of projects
  ...
What’s Next?




               27
Green Home Mortgage?
    HUD has implemented an FHA Energy Efficient

    Mortgage (EEM) Program.
    An inspection by a ...
Green Home Mortgage?
    FNMA and FHLMC currently does not offer a true

    green mortgage product or program.
    Secon...
Lender incentives
    B of A: $1,000 credit toward closing fees on new

    homes that meet efficiency requirements by
  ...
Questions?




             31
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Green Home Mortgage

  1. 1. Building a Green Future Green Home Mortgage 2009 1
  2. 2. Green Building Background 2
  3. 3. Definition What is Green Home Building? The careful design, construction, operation, and reuse or removal of the built environment in an environmentally, energy-efficient, and sustainable manner 3
  4. 4. Definition What is Green Home Building? Green homes contain common elements: Energy efficiency Indoor air quality Water conservation Resource efficiency Construction process 4
  5. 5. Why Green? U.S. Impact of Buildings On Resources Today 40% of Total Energy Use 71% of Electricity 38% Carbon Dioxide Emissions 36% of all Greenhouse Gas Emissions 30% of Raw Materials Use 30% of Waste Output 12% of Potable Water Consumption 5
  6. 6. Green Building Principles Depending on your location, a green building  program will follow one or more of these principles: Energy efficiency: Energy efficiency covers the  building, mechanical equipment and appliances. Water efficiency: This indoor/outdoor element  includes native, drought-tolerant landscaping, low-flow fixtures and water-saving appliances. Passive design: Orientation of the house on the  site, cross ventilation and roof overhang designs. 6
  7. 7. Green Building Principles Materials: Durable, low maintenance, recycled,  renewable and sustainable all come into play here. Construction process: Limiting construction  waste and preserving nature by limiting rainwater runoff and clear cutting. Indoor environmental quality: Thermal comfort,  moisture control and lighting play a role. Site and landscape: Native plants, animal  habitats and erosion control. 7
  8. 8. Green Building Green Building Certification programs  LEED for Homes: From the US Green Building  Council. Builders score points for things like solar panels and energy efficient appliances. National Green Building Standard: The National  Association of Homebuilders developed standards that are flexible depending on the region. Energy Star: A federal government program.  Homes must be at least 15% more efficient than homes built to the 2004 residential code. 8
  9. 9. Green Building Marketplace 9
  10. 10. Green Home Marketplace Green building is not a fad—it’s an industry trend 2010: 60 Up to 10% of building starts: 50 $60 billion $ in billions 40 Residental 30 Commercial 20 10 0 2005 2006 2007 2008 2009 2010 McGraw-Hill Construction Survey Results, 2006 10
  11. 11. Green Home Marketplace Estimated Size of Green Home Market McGraw-Hill Construction Survey Results, 2006 11
  12. 12. Green Home Building Green Home Market – Who is Buying Average age of 45 Married couples 79% college educated Located in South & West Nearly 2/3 have annual incomes over $50,000 McGraw-Hill Construction Survey Results, 2006 12
  13. 13. Green Home Building Green Home Market - Region 45% 40% 42% 35% 30% East 32% 25% Midwest 20% West South 15% 16% 10% 5% 10% 0% McGraw-Hill Construction Survey Results, 2006 13
  14. 14. Green Home Building Green Home Market – Income Level 35% 30% 32% 25% Under $25K 26% $25-$49K 20% $50-$74K 18% 15% $75-$99K 14% $100K or more 10% 10% 5% 0% McGraw-Hill Construction Survey Results, 2006 14
  15. 15. Green Home Building Green Home Market – Customer Satisfaction McGraw-Hill Construction Survey Results, 2006 15
  16. 16. Green Home Builders 16
  17. 17. Green Home Builders Who is building green? Builders with under 10 units per year • 2005: 35% of builders with at least 15% of projects green • 2006: 50% of builders with at least 15% of projects green • 2007: 66% of builders with at least 15% of projects green McGraw-Hill Construction Survey Results, 2006 17
  18. 18. Green Home Builders Who is building green? Builders with at least 10 units per year • 2005: 27% of builders with at least 15% of projects green • 2006: 39% of builders with at least 15% of projects green • 2007: 59% of builders with at least 15% of projects green McGraw-Hill Construction Survey Results, 2006 18
  19. 19. Green Home Builders Most cited triggers to increased residential green building •Energy cost increases •Publicity benefits •Consumer demand •Codes and regulations McGraw-Hill Construction Survey Results, 2006 19
  20. 20. Green Home Builders Most cited obstacles to increased residential green building •Higher costs •Consumer willingness to pay •Lack of education •Codes and regulations McGraw-Hill Construction Survey Results, 2006 20
  21. 21. Green Home Builders Top reasons to build green homes according to home builders 45% 33% Publicity Expand 25% 53% Business Very Important Competitive Somewhat Important 36% 46% Advantage Lowering 31% 51% costs Right thing 30% 62% to do McGraw-Hill Construction Survey Results, 2006 21
  22. 22. The Greening of America 22
  23. 23. Corporate Going Green Green as Part of Corporate Growth Strategy By 2009, 80% of corporate Is Green a Part of America is expected to be Company’s Growth Strategy engaged in green at least 15% of the time. 43% No 57% Yes 20% will be engaged in green 60% of the time. Survey respondents: 190 total, creating a representative sample 61% from companies with $1 billion + revenue McGraw-Hill Construction Survey Results, 2006 23
  24. 24. Corporate Going Green Fortune 500 Companies  Chevron Corp., BP and other oil companies are spending billions of dollars to develop alternatives to petroleum-based fuels.  Auto companies, led by Toyota, are selling tens of thousands of almost emission-free hybrids and are developing plug-in hybrids.  Wal-Mart has embarked on a $500-million-a-year campaign to save energy in all of its U.S. stores and distribution centers.  DuPont estimates that it has saved $3 billion from a nearly two- decade effort to dramatically reduce carbon emissions.  Both FedEx and UPS have made investments in vehicles that run at least partly on alternative fuels.  GE has doubled research and development budget to $1.5 billion into technology to reduce energy consumption and waste products.  Electronics makers including Dell and Hewlett-Packard are encouraging more recycling amid mounting concerns about the environmental effects of dumping electronics into landfills. 24
  25. 25. Corporate Going Green Financial Services Companies  Citi announced that it will direct $50 billion over the next 10 years to address global climate change through investments, financings and related activities to support the commercialization and growth of alternative energy and clean technology.  As part of its $20 billion, 10- year environmental initiative, Bank of America is launching the first of its environmentally sustainable products, an innovative donation program for new home equity customers. Customers who open a new Home Equity Line of Credit, register for the program, and use their equity line Visa® access card for combined purchases of $2,500 or more, will be eligible to direct a one-time $100 donation to Conservation International.  The Goldman Sachs Group has invested more than $1.5 billion in alternative and clean energy including solar and wind power, and also is establishing a business dealing in carbon-emission credits. 25
  26. 26. Recap  Green industry expected to grow to $6 billion by 2010  59% of large builders have at least 15% of projects designated green  A major trigger for builders to go green in publicity benefits  One of the major obstacles stopping builders from building green is a lack of education  2/3 of Green homebuyers have incomes over $50K  Consumers are willing to pay $18,500 more on average for green home  89% of tomorrow’s homebuyer are likely to switch brands to support a cause  By 2009, 80% of corporate America is expected to be engaged in green at least 15% of the time.  Wells Fargo has built and solidified a respected green reputation 26
  27. 27. What’s Next? 27
  28. 28. Green Home Mortgage? HUD has implemented an FHA Energy Efficient  Mortgage (EEM) Program. An inspection by a Home Energy Ratings System  (HERS) or energy consultant is used to determine the energy improvements/savings. The energy improvements must be over and above  those required for compliance with current FHA energy conservation standards. Presently, these standards are those of CABO 1992  Model Energy Code (MEC). 28
  29. 29. Green Home Mortgage? FNMA and FHLMC currently does not offer a true  green mortgage product or program. Secondary market challenges  No seasoned data on green home buyers  Appraisal challenges  Difficulty tracking green home sales in MLS  29
  30. 30. Lender incentives B of A: $1,000 credit toward closing fees on new  homes that meet efficiency requirements by Energy Star program. Citigroup: $1,000 off closing costs.  Chase: Offering Expanded Energy Conservation  Mortgages in some markets - $500 off closing costs. Countrywide: Offering between a ½ point to ¾  point incentive for homes that meet the Built Green designation. 30
  31. 31. Questions? 31
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