The North Shore Bank of Wisconsin has introduced a construction loan that promises “lucrative financial rewards” to those who choose to build an energy-efficient home using the new financing option.
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This loan allows buyers to use renewable energy sources that still are relatively inexpensive. The program is a new take on “Focus on Energy” certified homes, a statewide renewable energy program offered in Wisconsin.
Bank officials said they created “a special package” to allow higher debt-to-income ratios and low downpayments. To qualify, borrowers must have a FICO score of at least 680 and a loan-to-value rate of 90% to 95%. To make this type of financing more appealing, the bank is offering mortgage loan rates that are lower than the national average. Typically the debt to income ratio acceptable is not higher than 33% to 45%.
Focus on Energy New Homes are at least 10% more energy efficient than homes built to comply with the Wisconsin Uniform Dwelling Code.
Buyers need to meet with a loan officer to learn about the loan, start the mortgage origination process and provide the documentation, and find a builder in the directory of participating companies.
Further, the future buyer is introduced to an energy consultant who frames out the home and performs the first inspection. After the construction is completed a second inspection determines whether the property complies with the new energy renewal requirements before the homebuyer moves into the property.
John Rovinski, a loan originator with North Shore Bank, told this publication the bank is the first to start a partnership with the Wisconsin Energy Conservation Commission in an effort to provide more affordable mortgages and educate buyers about energy efficient homes.
“An energy efficient house is not necessarily built with expensive solar panels,” he said. “The whole point of the partnership” was updating the underwriting standards on “Focus on Energy” certified homes, Rovinski said. Since typically underwriters do not know anything about energy efficient homes, the bank started with educating staff “so they feel comfortable about these homes” who also are educating buyers about the long-term financial benefits of these homes.
Daily Briefing | Friday, August 19, 2011
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