Energy Efficiency and Real Estate in Bozeman and Beyond

According to a study conducted by the University of South Carolina Center for Community Capital, borrowers with energy-efficient homes are significantly less likely do default. In fact, they are 32% less likely. The study looked at 71,000 homes and their corollary loans, neighborhood characteristics, and energy rating. 

Borrowers with energy-efficient homes are significantly less likely to default, according to a study by the University of South Carolina Center for Community Capital.
Funded by the Institute for Market Transformation (IMT), the study found that default risks are on average 32 percent lower for borrowers with energy-efficient homes that met "Energy Star" guidelines.

The study examined 71,000 homes and accounted for loan, household and neighborhood characteristics, IMT said in a blog post. Homes earn Energy Star status by meeting guidelines set by the U.S. Environmental Protection Agency. 

IMT said that the results of the study argue that, "the lower risks associated with energy efficiency should be taken into consideration when underwriting mortgages."
A fact sheet on the study adds: "The findings have significant policy implications: Lenders might allow for lower risk premiums that are associated with interest rates, a more flexible credit profile, or a higher debt-to-income ratio for people buying or refinancing efficient homes. This would increase the affordability of energy-efficient homes among many borrowers, especially in high-cost areas."

This study does caution that there is another message that comes from the results. Homeowners who have invested in energy-saving upgrades may have some trouble getting the value back if the upgrades are not recognized by buyers, appraisers, and lenders. The category of ‘green fields’ is emerging in the real estate world to specify a home’s green features. This should allow for a heightened awareness of the green upgrades, but how it will be taken by the market is yet to be seen. (

Here in Bozeman, the ‘green’ movement that is trending throughout the country has taken roots and blossomed. In fact, the Bozeman, although the wolf wars we have experienced here have put a more negative conservationist spin on opinion, has allocated hundreds of jobs and $100K is salaries to the environmental sector. At least 13 organizations headquartered in Bozeman, Livingston, West Yellowstone and Gardiner that filed for tax-exempt status as land or wildlife, conservation or preservation organizations in 2009 reported employing 231 full-time, part-time and seasonal employees across the region and paying out a total of $8.4 million in salaries. (
These two green movements, national and local, will be compelling to keep an eye on an we enter a fresh spring season.


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