Washington, DC (June 11, 2008)- Today, U.S. Rep. Ed Perlmutter’s (CO-07) G.R.E.E.N. Act (Green Resources for Energy Efficient Neighborhoods) was heard in the House Financial Services Committee. H.R. 6078 provides incentives to lenders and financial institutions to provide lower interest loans and other benefits to consumers, who build, buy, or remodel their homes and businesses to improve their energy efficiency. This timely legislation reflects foresight and the considered input of a broad coalition of housing advocates, financial institutions, government leaders, developers, and the environmental community.
In prepared remarks, Perlmutter stated, “As Americans it’s our responsibility to move in a direction of energy conservation. Our infrastructure is old, and when renovation or rehabilitation efforts commence we must take the opportunity to use current technologies and standards to develop healthier, more sustainable neighborhoods.”
Furthermore, Perlmutter says, “This legislation proves that it is easy to be green. The GREEN Act helps revitalize our economy by making energy efficiency practices more affordable, accessible and achievable by consumers, businesses and government entities. By prioritizing energy efficiency practices, we can ease the woes of homeowners, lenders, financial markets, builders and our environment.”
This legislation raises the bar for environmental performance in affordable housing, authorizing new federal resources for green affordable development while providing incentive to the private sector to invest in green affordable homes for low-income people.
Key Provisions in the Bill Include:
Fannie Mae / Freddie Mac
Will be required to finance energy efficient and location efficient mortgages as part of their goals to satisfy federal guidelines. This will be incentivized by an additional credit (125%) for buildings that comply with the energy efficiency goals and support housing that complies with standards established in the legislation such as:
* Buildings near mass transit.
* Building using established energy efficient standards, products, and materials.
Similar to the Community Development Block Grant (CDBG) program, the legislation creates a Residential Energy Efficient Block Grant Program. Grants shall be given to local communities and states to carry out energy efficiency improvements in new and existing single and multifamily housing units.
Insurance companies are not allowed to deny insurance to homes in which power, heat, or electricity is provided from renewable energy sources and is not connected to any power grid. This does not prevent insurance companies from charging necessary rates.
Financial & Banking Institutions
Create green banking centers to provide consumers information on obtaining a mortgage or loan which rewards energy efficient or “green” improvements. It also alters the Community Reinvestment Act by allowing financial institutions to consider energy efficiency improvements made by low income, first time and other home buyers when appraising and assessing the home or building.
Testimony from Rep. Perlmutter as Submitted for the Record
Thank you Mr. Chairman for holding this hearing on HR 6078, the Green Resources for Energy Efficient Neighborhoods Act of 2008, also referred to as the GREEN Act. At the beginning of the 110th Congress I was appointed to chair the bipartisan Financial Services Energy Efficiency Task Force.
The Energy Efficiency Task Force, which consists of a number of members from the committee, held meetings with agency and organizational leaders to determine ways to improve energy efficiency within the financial services industry and housing sector while creating healthier communities.
I would like to submit for the record a letter of support signed by the following organizations:
Stewards of Affordable Housing for the Future
Alliance for Community Trees
American Institute of Architects
Bank of America
Center for American Progress
Center for Neighborhood Technology
Energy Programs Consortium
Enterprise Community Partners
Federation of American Scientists
Green Building Institute
Local Initiatives Support Corporation
National American Indian Housing Council
Stewards of Affordable Housing for the Future
The Department of Energy’s 2007 Building Energy Data Book reveals that buildings account for 39 percent of the total U.S. energy consumption, more than both the transportation and industry sectors. This is a staggering statistic and highlights the need to develop healthier building structures.
As Americans it’s our responsibility to move in a direction of energy conservation. Our infrastructure is old, and when renovation or rehabilitation efforts commence we must take the opportunity to use current technologies and standards to develop healthier, more sustainable neighborhoods.
The Green Act is a comprehensive attempt to move our Federal government in this direction. The bill language affects HUD, government sponsored enterprises like Fannie Mae and Freddie Mac, FHA, and traditional financial institutions. The goal is to create a market for energy efficient and location efficient mortgages by making the GSE’s, FHA and HUD eager to collect them.
Amending the charters for Fannie and Freddie to buy, sell, service, and otherwise deal in energy and location efficient mortgages and then increasing the certain percentage of the mortgages on their books which meet these standards will influence the market.
This bill provides both incentives and requirements to accomplish the overall goal of energy efficiency. In order to see the effectiveness of energy efficient mortgages (EEMs) and location efficient mortgages (LEMs), the legislation amends the Home Mortgage Disclosure Act to require data information for the number of and dollar amount of mortgages of single-family and multi-family housing which meet these standards.
H.R. 6078 incorporates the Federal Housing Authority by requiring the FHA to insure $1 billion worth of energy efficient homes.
Local and state governments need the resources to distribute to eligible entities when trying to accomplish these goals. That is why this bill creates a residential energy efficient block grant, which uses the same distribution formula as the Community Development Block Grant, and the bill creates a revolving loan fund which will be housed in the Department of the Treasury.
The housing programs administered by the federal government reach Americans who otherwise can’t invest in the types of improvements needed for lower monthly utility bills.
I appreciate the work of all the members on the Task Force and for the panelists who are testifying. This legislation is good for our national security, climate, and creates jobs.
Mr. Chairman, I yield back the remainder of my time.
GREEN Act of 2008