The document discusses various financing options for homeowners to incorporate energy efficiency and design upgrades into existing homes. It outlines programs like FHA 203(k) loans, VA and FHA energy mortgages, and Freddie Mac and Fannie Mae energy programs that can help finance such upgrades. Case studies show how whole-home energy ratings are used to estimate savings from improvements and determine financing eligibility. Flexible terms and cooperation across stakeholders are needed to fully utilize these energy improvement mortgage programs.

1. Creative Financing, Energy, and Design Options for the Residential Market David Lantz Owner Shelterwood [email_address] www.prairiegreenhomes.com

8. Home Energy Rating Results Estimated 20% air leakage reduction resulting from new windows and rim joist insulation. *Windows also qualify for an additional 30% tax credit. **The monthly finance cost is the monthly payment, including interest, that will pay for all the tabulated improvements when they are financed with a 30-year fixed mortgage at 4.75%. Measure Cost Savings New vinyl windows U-29, SHGC-0.29* $4,488 $358/year New closed-combustion water heater $400 Rim joist insulation and air sealing with DIY kit $300 Total $5,188 Month Cash Flow $27/month** $30/month

12. Home Energy Rating Results Measure Cost New roof and decking $7,000 Chimney repairs $1,000 Electrical modernization $5,000 HVAC; new dual-fuel heat pump and duct repairs $7,500 Water heater replacement to tankless model; requires chimney repair $2,200 Insulated and air-sealed ceiling $1,600 Insulated walls in 2x4 stud cavities $4,300 Insulated foundation walls and air sealing rim joist cavities $1,700 Total Added Cost to Mortgage Extra Monthly Finance Cost Monthly Energy Savings Monthly Cash Flow ~$30,000 $140 $260 $120

18. Financing Options

30. VA Energy Mortgage Program

34. FHA Energy Mortgage Program

37. FHA Energy Mortgage Example Standard Loan Home Sale Price $60,000 Interest Rate 8.0% Closing Cost $1,200 Cost of Energy Improvements $3,000 Average Life of Measures Calculated by Rating 10 Years Monthly Energy Savings $40 Standard Underwriting Sales Price $60,000 Appraised Value $60,000 Closing Cost $1,200 LTV 97.75% Loan Limit $58,640

38. FHA Energy Mortgage Example Energy Improvement Loan Energy Premium Calculation is essentially the Present Value of energy savings over the useful life of those improvements minus the cost of the life of the improvements. Standard Loan Calculation $58,640 Cost of Energy Improvements $3,000 Average Life of Measures Calculated by Rating 10 Years Annual Energy Savings $480 Energy Premium (calculated by energy rating software) $3,220 New Loan Amount Standard Loan Calculation $58,640 Energy Improvement Mortgage $3,000 New Loan Amount (no additional down payment nor income required to qualify) $61,640

39. Freddie Mac Energy Mortgage

42. Freddie Mac Energy Mortgage Example Interest Rate 8.0% Borrower’s Monthly Income $2,900 Cost of Energy Improvements $3,000 Projected Monthly Energy Savings from Rating $75

44. Fannie Mae Energy Mortgage

47. Fannie Mae Energy Mortgage Example Purchase Price $100,000 Cost of Energy Improvements $3,000 Projected Monthly Energy Savings from Rating $50

66. Tools of the Trade

67. Blower Door

68. Duct Blaster

69. Infrared Camera

70. Flow Hood

71. Duct Mask

72. Fogger

76. Air Sealing/Infiltration Control What Is Infiltration? Windows Attic Hatch Plumbing Ceiling Lights Wiring Floor Foundation Floor Chimney Exterior Doors Typical Sources of Air Leakage in the Home Penetrations Top Plate

78. REM/Rate Improvement Analysis

79. REM/Rate Improvement Analysis (cont.)

81. REM/Rate Improvement Analysis

82. REM/Rate Improvement Analysis (cont.)

83. Crawl Space Moisture Problems

84. Symptom: Light Mold Spotting in Crawl Space

85. Typical Response: Add Ventilation

86. Resulting Mold Explosion

87. 85 F 60% RH 70 F DP 73 F 90% RH 70 F DP Framing: 70-78 F Ducts: 55-65 F H 2 O Pipes: 55-65 F Floor: 65-70 F

88. Phase I Crawl Space Relative Humidity 50 60 70 80 90 100 6/3 6/13 6/23 7/3 7/13 7/23 8/2 8/12 8/22 9/1 Relative Humidity (%) Wall Vented Closed Outside

89. Crawl Space Walls

90. REM/Rate Improvement Analysis

91. REM/Rate Improvement Analysis (cont.)

92. Duct Sealing: What’s Missing From This Picture?

93. Mechanical Systems

95. REM/Rate Improvement Analysis

96. REM/Rate Improvement Analysis (cont.)

98. REM/Rate Improvement Analysis

99. REM/Rate Improvement Analysis (cont.)

101. REM/Rate Improvement Analysis

102. REM/Rate Improvement Analysis (cont.)

103. Complete Package With Furnace

106. Complete Package With Heat Pump

108. Dow Jones Industrials

110. Thank You

111. Questions www.prairiegreenhomes.com David Lantz Owner Office: 812-333-2991 Cell: 812-325-6931 [email_address] Mark Quigley Energy Consultant Office: 812-333-2991 Cell: 812-325-5299 [email_address]