Banking and Finance Law Daily Wrap Up, MORTGAGES—Casten/Bennet bill aims boost energy efficiency in home appraisals, (Mar 28, 2025)

By WK Editorial Staff

In addition to its environmental benefits, the GREEN Appraisals Act could stimulate economic growth by creating jobs in the green energy sector.

To promote energy efficiency in the housing market, Rep. Sean Casten (D-Ill.) and Sen. Michael Bennet (D-Colo.) have reintroduced the Getting Renewable and Energy Efficient Neighborhoods (GREEN) Appraisals Act. The legislation seeks to integrate energy-efficient and clean energy features into the residential home buying and appraisal process and standardize energy-efficient valuations and encourage sustainable building practices.

The GREEN Appraisals Act would require creditors provide borrowers with a written disclosure that they may provide an energy report for consideration during a home appraisal or loan application. The bill also provides that the appraiser's final opinion of the property's value may be affected by the energy report. The appraiser must consider the energy efficiency characteristics of the property, renewable energy features, estimated energy savings, and energy consumption relative to comparable homes when developing the appraised value.

The heads of the Federal Housing Administration and Federal Housing Finance Agency would be responsible to jointly prescribe guidance for creditors to implement the legislation, confirming the acceptance of various approaches to value related to energy efficiency and renewable energy.

Commenting on the bill’s introduction, Casten said “Whether it’s a solar panel on your roof or a heat pump in your backyard, energy-efficiency technologies should be considered when assessing your home’s value,". He further noted that this legislation incentivizes homeowners to reduce their energy costs and ensures their homes are properly valued.

Senator Bennet highlighted the role of energy-efficient home upgrades in transitioning to a clean energy economy, underlining the bill's potential to reflect the full value of homes nationwide. "By cutting energy costs and reducing emissions, energy-efficient and clean energy home upgrades play an important role in our country’s transition to a clean energy economy," Bennet remarked. He added that the bill will help ensure property appraisals reflect the complete value of homes in Colorado and across the nation by accounting for energy-efficient and clean energy investments.

The GREEN Appraisals Act has garnered endorsements from several industry stakeholders, including the Appraisal Institute, the American Society of Appraisers, and the Building Performance Association. These endorsements reflect broad support for the bill's objectives of promoting energy efficiency and supporting green jobs within the housing industry.

Companies: American Society of Appraisers; Appraisal Institute; Building Performance Association

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