CALIFORNIA ENERGY COMMISSION
                         NEWS RELEASE

For Immediate Release: February 14, 1995
For More Information Contact: Claudia Chandler (916) 654-4989

         ENERGY EFFICIENT MORTGAGES REWARD HOMEBUYERS

SACRAMENTO --The California Energy Commission is generating 
interest in a creative mortgage program that can ease monthly 
payments by cutting energy bills.

Energy efficient mortgages available through the Federal Housing
Administration, the Veterans Administration and even 
conventional lenders (Freddie Mac and Fannie Mae), have been 
around for over a decade.  But the Commission says because of 
a lack of publicity in the marketplace, these mortgages all too 
often remain a secret.  

So, with $200,000 provided by the Legislature,  the Energy 
Commission has launched a pilot program to educate  real estate 
companies as well as lending industries and consumers about the 
potentials of energy efficient financing.

Energy efficient mortgages allow home buyers to stretch their 
debt-to-income ratios by up to 2 percent on new and existing 
homes that meet energy efficiency standards.  For buyers 
purchasing a poorly-insulated existing home, the mortgage 
allows them to finance cost-effective energy conserving 
improvements.

California is among six pilot states -- Alaska, Arkansas, 
California, Colorado, Vermont and Virginia -- designated by the 
U.S. Department of Energy and the U.S. Department of Housing 
and Urban Development for the program.  For FHA loans, between 
$2,000 to $8,000 of cost-effective energy improvements can be 
added to the mortgage for the purchase of an existing home that 
is not energy efficient.  VA loans also allow up to $6,000 for 
energy upgrades.

"Money saved from monthly utility bills converts to a 
debt-to-income ratio that works to the homeowner's advantage.  
It allows for the energy upgrades of an existing home, affords 
home buyers more home for their investment and can even make 
the difference in qualifying for the first-time buyer," says 
Energy Commission Chairman Charles Imbrecht.

"The program is a natural for California.  As a result of the 
state's building and appliance energy efficiency standards, all 
new homes in the state are designed, constructed and equipped 
for energy efficiency," says Imbrecht.  "Other states needed 
to develop separate criteria to meet this program, so California
is already ahead of the game."

Utility expenses account for a sizeable portion of a family's 
total housing cost.  With money saved from energy bills, more 
people will find it easier to qualify for a new house or 
refinance to retrofit an existing home.

"The program spells lower energy bills and a more comfortable 
home for the buyer with an energy efficient house," says 
Imbrecht.

To carry out the requirements of the legislation, the Energy 
Commission is working in several areas to stimulate demand for 
energy efficient mortgages.  

First order of business is to gain support among executives of 
mortgage lending and real estate companies. Once this support 
is established, the Commission will fund training for those who 
process energy efficient mortgage loans.

The Energy Commission will work with the California Association 
of Realtors to develop a correspondence course on energy 
efficient mortgages. Realtors taking it can earn continuing 
education credits.

A second course will be presented in a series of seminars 
throughout the state.  This course will be developed and 
presented in partnership with Pacific Gas & Electric, Southern 
California Edison and the California Home Energy Efficiency 
Rating System Inc.

The Commission also plans to inform the public about energy 
efficient mortgages at first-time homebuyer seminars to be 
organized with the Sacramento Home Loan Counseling Center and 
will develop an information video for homeowners.

To ensure that energy retrofitters and weatherization workers 
do quality work, training will be offered with help from the 
Air Conditioning Trade Association and the Insulation 
Contractors Association.

Commission data indicates that more homeowner investments will 
spur economic growth by creating business and jobs in the 
construction, mortgage and lending industries.

For information on the seminars, call: 

Salina Abdullah, Pacific Gas and Electric, (510) 866-5771
Mary Seabold, Southern California Edison, (818) 812-7568.

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File Name: 95-02-15_Energy_Efficient_Mortgage