During a July 18 meeting hosted by the White House and the U.S. Department of Housing and Urban Development, the Appraisal Institute asked that policy revisions be made to the Federal Housing Administration’s lender guidelines as they relate to “green” and energy-efficient features.
The meeting focused on appraisals and underwriting for green mortgages and the Appraisal Institute was invited by FHA Commissioner Carol Galante to discuss the connection between energy-efficiency and single-family housing finance.
The Appraisal Institute was represented by President-Elect Ken P. Wilson, MAI, SRA, and Director of Government and External Relations, Bill Garber.
AI told the meeting that some underwriters have asked appraisers to remove income approach adjustments for green or energy savings and to replace the information with comparable sales that do not exist in the market.
AI expressed concern about how much authority underwriters have to question an appraiser’s professional judgment when appraisals that include green or energy-efficiency adjustments are being reviewed, and recommended clarification on this important issue.
Attendees generally agreed with AI’s recommendations, and the FHA said it will review those and others related to lender participation in FHA energy-efficiency mortgage and rehabilitation loan programs that are a part of President Obama’s Climate Change Initiative.