The bill instructs lenders with loans backed by Fannie Mae, Freddie Mac and the Federal Housing Administration, (which is about 90 percent of the market) to account for expected energy cost savings.

Those savings must then be factored into how much the borrower can afford in a monthly mortgage payment, so the energy savings are essentially subtracted from a borrowers expenses.

“You would be amazed at how a few dollars can make a difference in a transaction, $50 in a monthly payment, because people calculate their purchase and what to borrow based upon what it’s going to cost them per month,” argued Isakson.

The bill also tells lenders to add the value of expected energy savings to the value of the home in the appraisal. Since mortgage amounts are based on a percentage of the value of the home, this would allow borrowers to get a bigger mortgage.

(Read more: Housing starts stall, optimism doesn’t)

That’s where homeowners, like Tamara Lyons in Darnestown, Md., who already have green technology in their homes, will be able to make more money when they sell. The value of green will be in the appraisal.

“A lot of my neighbors feel that it’s too much of an initial investment, and they don’t want to put that money down,” explained Lyons, “But, if they see that it’s going to add to the value of their home for resale purposes I think it would definitely make the idea more sexy and more appealing.”

The legislation could also benefit companies that are investing heavily in green product development.

“Certainly companies like Dow or Home Depot who have been working on selling and highlighting their energy-efficient products. Insulation manufacturers … the whole host of manufacturers who make the products that go into the homes that make them more energy efficient,” said Stephen Cowell, CEO of Conservation Services Group.

“So we have a host of technologies and this would give manufacturers, builders, retailers and retrofit companies all an opportunity to begin reaching consumers to say ‘if you take advantage, if you put these products in, you can increase your home’s value’ because it’s now available to a broader range of homebuyers in the marketplace.”

Article source: http://www.cnbc.com/id/100899584

In 2008, Congress stepped in to adjust conforming loan limits from $417,000 to $729,750 in an effort to stimulate the economy by making more money available for home buyers and enticing people to buy. Since then Congress has extended them every year through September 30, 2011. As it stands, effective October 1, 2011 it will cost home buyers more to finance a loan exceeding $650,500. This will affect many houses on the San Francisco Peninsula market.

“We are quite possibly facing a roadblock to any glimmers of recovery if this set-back takes place,” said Mary Ann Teixeira, a Burlingame real estate professional. “Buyers would need to come up with larger down payments and be able to qualify for higher mortgage payments. All mortgages backed by Federal Housing Administration (FHA), Fannie Mae and Freddie Mac, known as government sponsored enterprises, (GSEs) would be affected.”

Bay Area real estate will be hit hard by the change in loan limits when the conforming loan adjusts down to $650,500. Because of the high cost of Bay Area housing, purchasing a home often requires a loan in excess of $650,500. Given that jumbo loans generally carry a higher interest rate, monthly payments would increase and further hamper the buying power of potential new home buyers. Additionally, with the burden of a higher monthly mortgage on a household, businesses and services in the communities with homeowners who have less expendable dollars will suffer.

According to a recent study conducted by the California Association of REALTORS®, under the new GSE loan limits would impact the borrowing power of a potential Bay Area home buyer by $104,250. Projecting this onto 2012 home sales, 10.7% of San Mateo County’s home sales would be rendered ineligible under the new lowered GSE loan limit. Other Bay Area counties affected are Marin (12.2%), Contra Costa (11.5%), San Francisco (9.9%), Monterey (8.8%), Santa Clara (7.8%), and Alameda (6. 3%).

For additional information about reasons to use a Bay Area real estate agent or San Francisco Bay Area Peninsula real estate and relocation, call Mary Ann Teixeira at (650) 241-0318, or visit her website at www.maryannt.com.

About Mary Ann Teixeira

Mary Ann Teixeira is a licensed REALTOR® with McGuire Real Estate in Burlingame, California who specializes in relocation services, homes for sale, and luxury homes. She is a seasoned buyer’s agent who serves the San Francisco Bay Area Peninsula communities of Atherton, Burlingame, Cupertino, Hillsborough, Los Altos, Los Altos Hills, Los Gatos, Menlo Park, Mountain View, Palo Alto, Portola Valley, Redwood City, San Carlos, San Jose, San Mateo, Santa Clara, and Woodside.

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For the original version on PRWeb visit: www.prweb.com/releases/prwebburlingame_real_estate/peninsula_realtor/prweb8616223.htm

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/06/30/prweb8616223.DTL