Low-Interest Home Loans for Net Zero Home Buyers

Low-interest loans for net Zero Homes

As the number of net zero homes increases, many Americans are wondering: How do I buy a green home?

The process starts with finding the right energy-efficient home in your area. For instance, if you live in Florida, you can look through our collection of net zero homes for sale in Florida. At Brite Homes, we’re busy building green homes across the Sunshine State, from Palm Coast to Volusia. You can even build a green home on your lot with Brite.

Aside from finding your dream home, however, purchasing a net zero home requires gathering the funds to make an offer. And if you’re not paying in cash, you’ll need to apply for a mortgage.

In this guide, we’ll show you why buying a green home makes financial sense. We’ll also show you the most cost-effective way to finance your dream net zero home.

Are net zero homes worth it?

You might be wondering: With all their perks and draws, are net zero homes more expensive?

The short answer: No. In fact, it’s quite the opposite: Net zero homes are more affordable than traditional homes in the long run. They do, however, require a slightly higher initial investment.

On average, net zero homes command a 5–10% higher price than similar, non-energy efficient homes in the same market. So, if you buy a $300,000 home, that means you could spend anywhere from $15,000 to $30,000 on a down payment.

If you decide to build your own green home, you’ll have more control over the costs, but will still pay a little more than you would to build a traditional home. The good news is that many green home builders, such as Brite Homes, can work with your budget.

You may be put off by the extra cost of green homes—and even wonder whether it’s worth it to buy one. However, that slightly higher upfront investment will really pay off in the long run. Here’s why:

  • Energy and maintenance savings: Depending on where you live, you can recoup that 5–10% green home premium in as little as seven years. The Rocky Mountain Institute found that energy and maintenance savings can cover the extra initial costs of net zero homes after 7–14 years.
  • Asset appreciation: Robert Kociecki, President of Brite Homes, states that “once appraisers start factoring in energy efficiency,” values will increase. As Kociecki says, “experts believe the appraised value difference between net zero homes and traditional homes could be 10–15%.”
  • Lifestyle benefits: Brite homes, for instance, offer smart automation for convenience and comfort. Advanced air filtering means you breathe cleaner air, while airtight construction allows for better temperature regulation.
  • Less maintenance: In order to be considered a zero energy ready home, a property must meet high standards and requirements set by the US Department of Energy. A high-quality home means less maintenance (and, therefore, less hassle and fewer dollars spent in the long run).

Considering the current state of the stock market, green homes can also be viewed as alternative investments. After all, net zero homes not only save you money on utility bills, but they’re also a great way to build long-term wealth. They’ll also hold value more predictably than the stock market.

Simply put, by buying a green home, you’re investing in your future. As you can see, the quality, efficiency, and comfort of net zero homes save you massive amounts of time, energy, and money in the long run. Without a doubt, net zero homes are worth it.

Are there good loans for green homes?

It’s important to note that economic factors outside your control will come into play here. Let’s start by addressing the most pressing current circumstance: the COVID-19 pandemic.

Before we continue, we’d just like to say that our hearts go out to everyone affected by the COVID-19 pandemic. These are difficult times, but we will get through them together. Stay safe, stay healthy, and stay strong.

As the novel coronavirus swept across the U.S. in March of 2020, clobbering the stock market and leading 3.3 million people to file for unemployment in one week, the Federal Reserve cut interest rates to zero.

Interest rates had already been low before COVID-19 hit the American economy. According to Bankrate, the average mortgage rate for a 15-year fixed loan sat at 3.2% in February 2020.

Considering how low current interest rates are, now is a great time to finance any type of home, including net zero homes. While we don’t know what will happen in the coming years, you can get low-interest loans for any type of property as long as you meet the lender’s requirements (which may include credit, income, household debt, and more).

While there are good financing options for net zero homes, you have to know where to look. Let’s discuss how to find the best financing option for your home.

1. Check the Energy Efficient Mortgage Program

Start at the federal level when looking for loans for green homes. The Department of Housing and Urban Development runs the Energy Efficient Mortgage program (EEM).

In the EEM program, program lenders calculate energy savings as part of a mortgage offer. This enables you to qualify for a larger mortgage, and therefore buy a bigger, better green home. An Energy Efficient Mortgage can also lower your loan-to-value ratio, which should mean lower interest rates.

2. Check your state’s loan programs for green homes

Net zero loan programs vary by state. Some states offer interest loans for green homes. Other states provide incentives to net zero home buyers in different ways, such as through solar energy tax credits.

For instance, in Maryland, you can get a low-interest loan for the construction of a net zero home with a HERS energy rating of 50 or lower.

In Florida, net zero home buyers get a 100% property tax exemption for a period of time. While it’s not a low-interest loan, this does help lower housing costs. Think of how much property taxes cost you now—how much would you save by not having to pay them for five years?

To find out the specific incentives for energy-efficient homes in your state, search the Database of State Incentives for Renewables and Efficiency. This site catalogs all the low-interest home loan programs and green energy incentives across all U.S. states and its territories.

3. Ask your lender to factor in the home’s energy efficiency

While some real estate lenders use appraisers that factor in energy efficiency, many still don’t. Here’s a simple solution if they don’t: Advise them to do so!

When you apply for a mortgage with a lender, ask them to include this Residential Green and Energy Efficient Addendum. If the appraiser uses that addendum, you’ll get a more accurate appraisal—one that factors in the energy savings, high quality, and superior comfort and convenience of green homes. And that could help you get a higher loan and lower interest rates.

4. Take initiative to get a low-interest loan

To get a low-interest loan for a green home, we advise that you:

  • Work with a green energy-savvy realtor
  • Work with a lender who has experience with net zero home lending
  • Show your lender the proof that energy efficient homes have lower foreclosure rates (a study by the Institute for Market Transformation found that default risks for energy-efficient homes are 32% lower)

Can I afford to buy a net zero home?

Now, it’s time for this final question: Do you have enough money to buy a zero energy ready home?

Here’s the answer: You probably do.

If you can afford a traditional home in your area, then you can afford a net zero home, too. Green homes are no longer just for the rich. With more and more green builders around the country, net zero homes are more affordable than ever before.

For instance, at Brite Homes, we build zero energy ready homes across Florida, in markets like North Port and Palm Bay. Our homes’ prices start in the low $200,000s, making them affordable for many families.

One of Brite’s net zero homes in Florida

One of Brite’s net zero homes in Florida

You can easily search for net zero homes in your city or town. Just specify that you want an energy-efficient home on whatever platform you prefer and indicate your preferences for size and price.

If you would instead like to build your own green home, you can have a green builder in your area construct the home according to your budget and preferences. Search the Department of Energy’s zero energy ready homes website page for builders in your area.

Located in Florida? We’re ready to help you move into a green home today. And, due to the current COVID-19 pandemic, we’ve made it easier than ever to virtually tour net zero homes for sale in Florida.

On Brite Home’s homepage, you can take a virtual tour of our zero energy homes for sale. You can also request a virtual consultation with our team.

Call us at (833) 922-7483, send an email to info@britehomes.com, or click the link below. We can give you an in-depth tour of our homes and answer any questions you may have about the net zero home buying process. We’ll help get you moved into a green home as soon as possible.

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