Energy-efficient homes have significantly lower default and delinquency rates than typical homes, according to an internal analysis conducted for a major financial institution last year. Here’s yet another reason why it makes no sense that Fannie Mae and Freddie Mac have effectively killed Property Assessed Clean Energy (PACE), a financing tool that has helped make efficiency improvements affordable for thousands of American homeowners.
Homes built to federal Energy Star standards for efficiency had default and delinquency rates 11 percent lower than other homes, the 2009 analysis found, according to two people familiar with the document. The analysis accounted for variables including income and location, since many new homes are built in sprawling areas (where high transportation costs contribute to foreclosure rates).
“It was a robust statistical analysis that found, with a 99-percent confidence interval, that energy-efficient homes had significantly lower default and delinquency rates,” said one person. Both sources asked to remain anonymous to protect relationships with finance institutions.
The nation’s largest PACE program, in Sonoma County, Calif., has also found that energy-saving improvements tend to make homeowners more financially secure. The property-tax delinquency rate for the county’s 900-some PACE participants was 1.2 percent, compared with 3.5 percent for the county as a whole, according to deputy county counsel Kathy Larocque.
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