Bill > HR4615

This bill, titled the Sensible Accounting to Value Energy Act of 2014, aims to improve the accuracy of mortgage underwriting by Federal mortgage agencies by requiring them to consider energy costs when evaluating loan applications. It defines "covered agencies" as executive agencies and Federal Government agencies, including enterprises like Fannie Mae and Freddie Mac, and "covered loans" as those secured by a home and issued, insured, purchased, or securitized by these agencies. The bill finds that current loan affordability tests, like the debt-to-income ratio, are inadequate because they don't account for potential energy cost savings from energy-efficient homes, and that property appraisals often don't reflect the value of energy efficiency. Therefore, the bill mandates that Federal mortgage agencies, specifically through the Secretary of Housing and Urban Development (HUD), develop guidelines to include estimated energy cost savings as an offset to regular expenses in affordability tests, and to incorporate the value homeowners place on energy efficiency into loan-to-value ratio calculations, while avoiding double-counting. This process will involve using energy efficiency reports, such as those from the Home Energy Rating System (HERS), to estimate savings, and these reports will be provided to appraisers and disclosed to consumers. The bill also requires agencies to report on the use of these enhanced underwriting criteria and their impact on default and foreclosure rates, and establishes an advisory group to help implement and refine these new guidelines.