Lansing-based mortgage company
Indigo Financial Group is offering bigger home loans to those who make energy-efficiency improvements to their homes. Borrowers are allowed to borrow more money based on the estimated utility bill savings realized from the improvements.
According to excerpts from the article:
Lenders are the latest group to jump on the environmental-marketing bandwagon by pitching mortgage products that offer homebuyers bigger loans or discounts if they are making energy-efficient improvements - or if their new home meets certain efficiency standards. Last month, Citigroup Inc.'s mortgage division launched a program that offers $1,000 off closing costs with its energy-efficient mortgage through the end of the year. Also last month, Bank of America Corp. launched an Energy Credit mortgage, which offers a $1,000 credit toward closing fees for mortgages on new homes that meet efficiency requirements set by the government's Energy Star program. J.P. Morgan Chase & Co.'s mortgage division recently began offering Expanded Energy Conservation Mortgages in some markets that give borrowers more credit, as well as $500 off closing costs, if they find a builder who will use a specific type of spray-foam insulation.
Smaller lenders, too, are promoting energy-efficient mortgages. Indigo Financial Group, based in Lansing, Mich., started selling such mortgages in Michigan, Indiana, Illinois and Florida in 2005, and this year expanded its services into Kentucky and Missouri.
While energy-efficient mortgages have been available from many lenders for some time, they are receiving renewed attention. They allow borrowers to qualify for bigger loans because lenders permit the estimated savings on utility bills to be added to the borrower's qualifying income. For example, energy-efficient improvements could save a homeowner $50 a month. The $600 extra a year could allow a person to borrow about $10,000 more on a 30-year mortgage, depending on the interest rate, says Mark Wolfe, executive director of the Energy Programs Consortium, a Washington, D.C.-based nonprofit that helps coordinate state and federal energy policy.
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