Home Energy Rating (HERS Rating):A HERS rating is conducted in accordance with the stringent standards and practices of the Residential Energy Services Network (RESNET) and is used by; the mortgage industry for Energy Improvement and Energy Efficiency Mortgages, by the Environmental Protection Agency / Department of Energy for Energy Star Compliance / Certification, and by the Internal Revenue Service for Energy Star and Builders tax credits. There are two types of ratings, projected ratings and confirmed ratings. Projected ratings are determined from building plans and specifications while confirmed ratings are determined from extremely detailed on-site inspections, analysis, and diagnostic testing. The home is computer modeled and given a specific HERS score that rates the efficiency of the rated home compared to an identical home built to the standards of the 2004 International Energy Conservation Code (IECC) and subject to identical environmental conditions. Once a rating is completed reports are generated that project the energy consumption and carbon footprint of the house “as a system” and for each individual sub-system (heating, cooling, hot water, lighting, etc.) After a home is modeled a variety of energy improvement packages can be modeled with projected energy savings, carbon emission reductions, and return on investment for each package.For new home purchases or refinancing, certain mortgage lenders will roll the cost of the energy upgrade package into the mortgage amount. This is due to monthly savings in energy costs offseting the additional cost to service the additional amount of the mortgage.If purchasing a new energy efficient home certain mortgage lenders will also increase the debt-to-income ratios, qualifyingthe borrower for a larger loan amount in recognition that the borrower will have lower monthly energy expenses.
Advantages of a HERS Rating
Allows home buyers to compare estimated energy costs of one home to another
Used by the mortgage industry for Energy Improvement and Energy Efficiency Mortgages
Allows home buyers to qualify for a larger mortgage amount if purchasing an efficient home
Allows home sellers to increase the marketability of their energy efficient home
Allows sellers of inefficient homes to increase marketability by pre-designing specific energy upgrade packages with new projected energy consumption calculations, and where the buyers can incorporate the costs of the upgrade into their purchase mortgage
Used by home builders and remodelers for Energy Star certification
Used for Energy Star and Builders IRS tax credit certification
