The Home Energy Score
Peter Rusin
March 17, 2016
The Colorado Energy Office
MISSION STATEMENT
The CEO’s mission is to improve the effective use of all of Colorado's energy
resources and the efficient consumption of energy in all economic sectors,
through providing technical guidance, financial support, policy advocacy and
public communications.
DEPARTMENT VISION
The CEO’s vision is to help Coloradans live more prosperous and healthy lives
by promoting innovative energy production and efficient energy consumption
practices that are beneficial to the economic and environmental health of
the state.
Program Overview
The presentation will be broken up into two parts:
The first part will review the Home Energy Score and how the State
arrived at the point of offering this tool.
The second part of the class will review how you can use the Home
Energy Score as a selling or buying tool.
What I hope you take away:
A basic understanding of how the Home Energy Score and how to
leverage the tool for your clients
Where to find additional local resources… you do not need to be an
expert in energy efficiency.
What is the Green MLS
Ø 
The Real Estate Transaction Initiative aims to increase energy efficiency and the use
of renewable energy at the time of sale and is centered around the Green MLS.
Ø  The effort can be broken into three overlapping phases: Implementing the fields,
Increasing Use / Retrofits, and Maintaining the Market.
Ø 
The ability to value high performing homes will increase market penetration of high
performing homes.
Buyer
Lack of information prevents
EE from becoming a decision
point in purchases
Builder/Remodeler
Few incentives for
promoting EE in new/
existing construction
without known market
Green MLS
Lender
Lack of data and secondary
markets prevents EE from
factoring in lending decisions
Appraiser
Has tools to value EE, but
local data needed to
reflect market value
Searchable Certifications
Working with Appraisers
Ø  The CEO has conducted three valuation studies that have been peer reviewed by professional
appraisers with key results:
• 
Owned Solar PV has a positive market impact and the study home has a premium range of
value for the systems $1.45 per watt to $2.57 per watt; none sold for less.
• 
Energy efficiency’s impact is market specific, but appraiser’s need more reliable and
accessible energy efficiency information is needed (ties HEScore effort)
• 
In the northwest Denver market non-labeled new homes have the same efficiency levels
of ENERGY STAR New Homes, showing market adopting of energy efficiency as a feature.
• 
The studies confirm that listing energy efficiency, renewable energy (solar), and “green”
should be done when listing properties.
Green Building in the Region
What About Existing Homes?
How the CEO has moved forward
Ø  REALTORS® need a low cost tool that can provide reliable data for
their clients to continue to show national leadership.
Ø  Link REALTORs® to resources for that can help clients sell or buy an
inefficient home
Ø  Continue to conduct valuation studies with profession appraisal
organizations and solicit feedback from the REALTOR® community
Energy Efficiency is not just about adding fields
or the REALTOR®
Home Inspectors
Buyer
Can provide 1st level
energy information
•  Develop awareness through
consistent information
•  Network to make time of sale
retrofits easier
Builder/Investor/Seller
Searchable
MLS fields
•  Provide resources to help
market properties
•  Studies potentially could
show demand
Appraiser
•  Develop local data needed to
reflect market value
•  Provide Educational
Opportunities
Lender
• 
Ensure appropriate loan
products are available
•  Education on available products
Colorado Energy Office | www.colorado.gov/energy 9
© 2011 State of Colorado
What is the Home Energy Score?
•  A score from 1- 10 that one
can use to compare the
energy use of homes.
•  The scale is set to local
conditions, where a 5 is the
average home in each
location.
•  Does not include any
information on renewable
energy
•  New homes will typically
score 9 or 10 on the scale.
Source: Dept. of Energy
Home Energy Score Basics
What Homes Qualify for the Home Energy Score?
•  Only single family homes (including attached), triplexes, and town homes
can use the Home Energy Score
•  92% of all owner occupied homes in Colorado meet this definition.
What to Expect:
•  A stand along score will take about an hour for a BPI Rater to walk through the
home and gather data.
• 
When combined with a typical home inspection the inspector will need
15-20 extra minutes
•  The BPI Rater will present a waiver on the CEO to use the score. The CEO will
not publish an address level data without permission (from home owner).
•  The score maybe immediately available or come within the standard home
inspection report.
Colorado Energy Office | www.colorado.gov/energy 11
© 2011 State of Colorado
Page 1 of the Colorado Home Energy Score
Colorado Energy Office | www.colorado.gov/energy 12
© 2011 State of Colorado
Page 2 of the Colorado Home Energy Score
Colorado Energy Office | www.colorado.gov/energy 13
© 2011 State of Colorado
Changing Buyer Preferences
Source: NAR
Changing Buyer Preferences
Source: NAR
How Do I Know if a Home is Efficient?
The easiest way is to have a home that has been scored or labeled:
Ø  New Homes are very easy in Colorado, just ask the builder for the various building code
checklists.
Ø  Do you want to advise your buyer of an existing home on the efficiency of a home or look at
the efficiency rating of your sellers home to include in your broker remarks?
The Home Energy Score can help:
Ø  Provide 3rd party reliable data that you can incorporate into marketing a highly efficient
property
Ø  Help your clients see behind walls and truly know how the house performs and keeps you
from guessing or putting yourself in a liable position.
Home Energy Score
If Your Seller has an Efficient Home
Three Things You Should Do:
1. 
If you know the home your selling has efficiency features recommend
that your client get a Home Energy Score and highlight features in
marketing materials.
Utilize the idea of form, function, and performance
2. Check the EE boxes on the MLS data input form and/ or add
information to your remarks: “ENERGY STAR Appliances”
3.
Provide all documentation to the appraiser.
Other Ideas
for listing…
Form, Function, and
Performance
Function
4 bed | 4 full bath | 3707 sqft | Single Family
Keith Alba
phone: 303-325-7687
mobile: 303-478-7246
Form:
•  Hardwoods in living area
•  Granite in kitchen
•  Stainless Steel
•  Appliances
Function:
•  Square Footage
•  Number of Bedrooms
•  Garage Spaces
•  Finished Basement
Performance:
•  How much energy or
water does this property
use?
•  Is it close to amenities
•  Does it have healthy
indoor air quality?
$427,350
$427,350
Gorgeous Ashbrook model by Lennar Homes in Incredible Orchard Farms location! The
main floor consists of Engineered 5" plank Steel Hardwood flooring through the study,
family room & kitchen area. You'll love dining in w/ inclusions such as Slab Granite
countertops w/ a Tumbled Stone Tiled Backsplash & Maple Chiffon Cabinets! The large
center island is perfect for entertaining guests! You'll notice the Granite countertops
in the 5 piece master bath. Enjoy the perks of owning an energy efficient home w/
features such as Solar & double pane windows! Visit Orchard Farms today to see plans
for the open space & trail areas! Great location near shopping & dining. Cabelas is
nearby as is I-25, E-470 & quick access to DIA. This home is being constructed w/
expected completion date in October. Move in before Halloween! Be sure to stop by
the sales office to check out this unbelievable value! Photos are of model home.
Colorado Energy Office | www.colorado.gov/energy
19
© 2011 State of Colorado
Other Ideas for listing…
Matthew Leigh
Keller Williams Realty Success
[email protected]
(720) 236-2373
Function
This airy and open contemporary remodel in the Cherry Creek School District is a must see! Located within quiet Ptarmigan Park
on a corner lot, this spacious home with vaulted ceilings and THREE brick fireplaces and a fully finished basement has updates
galore! The kitchen will delight any cook with its's new corian counters, under mount sink, tile back splash and convection oven.
New carpet and gorgeous hardwood flooring throughout plus brand new lighting in kitchen, living and dining areas. Many
exterior updates as well including brand new front fence and gate, and new driveway, paths and concrete patio. You'll have
peace of mind knowing the A/C, furnace, roof and energy efficient triple pane windows and sliding glass doors are all less than 8
years old. Tons of storage and close to highways and light rail. Get you buyers in while you can - this is a hot one!
Performance
Colorado Energy Office | www.colorado.gov/energy 20
© 2011 State of Colorado
FHA’s Fall Announcement
The new FHA SFH Handbook released in fall of 2015 incorporated two
major changes:
Ø 
Ø  Homes that Score 6 or higher on the Home Energy Score will be
eligible to increase their qualifying income ratio by 2%.
Ø  Existing Homes no longer need a HERS Index Rating for the Energy
Efficient Mortgage.
What does the stretch ratio mean:
Ø  Colorado Median Household Income
is almost $60,000
•  Typically this household would
qualify for $240,000 at 4%
interest rate
•  With stretch ratio the same
household can afford at least
$15,000 more home.
Home Buyers and Energy Information
Leveraging Home
Inspectors and Current
Utility Programs to
offer Home Energy
Score
Buyer
Lack of information prevents
EE from becoming a decision
point in purchases
Builder/Remodeler
Few incentives for promoting
EE in new/existing
construction without known
market
Green MLS
Appraiser
Has tools to value EE, but
local data needed to reflect
market value
Lender
Lack of data and secondary
markets prevents EE from
factoring in lending decisions
Buyer Needs:
How is the CEO meeting these needs?
•  Provide information to make
choices
•  Home inspectors can help fill the information gap by providing a
basic information and connecting to Energy Smart type programs
that offer energy coaching, aka energy concierge.
•  Loan Products that do not hold up
the real estate transaction
•  The goal is with every furnace or hot water heater replacement that
is part of the contract, having the inspector call out ENERGY STAR
equipment, not just replacement.
REALTOR® OPPORTUNITY
Ø  NAR’s D.A.N.G.E.R report analyzed emerging trends that could have an
negative impact on today’s REALTOR®, MLS vendors, and local boards.
Ø  Danger 5 of 10, the decline in relevancy in agents due to failure to
change or respond to changing consumer demands.
Ø  Danger 9 of 10, commissions concentrate into a few hands, as a small
group of REALTORS® take a larger share as these REALTORS® develop
a winning formula to stay ahead of consumers.
Working with the State Association
Colorado Association of REALTORS®
CEO, Tyrone Adams
“Until now, a home’s energy efficiency benefits were difficult to
quantify and compare. A Home Energy Score provides homebuyers a
chance to evaluate a home’s efficiency features before they buy so
they can make the most knowledgeable decision on one of the biggest
investments in their life.”
www.BetterBuildingsCO.com
How Can I Help My Home Buyer Client
Ø  A good place to start is www.BetterBuildingsCO.com
Ø Provide a welcome gift of CFL or LED light bulbs even just for one floor or
room.
Ø  If a furnace or hot water heater replacement is part of the contract, ask
for ENERGY STAR equipment
Ø  Talk with your local FHA/VA approved broker or your conventional
Fannie Mae lenders about the Energy Efficient Mortgage feature or
renovation loan products
Ø  Know where to send your clients… a local energy coach sponsored by many
utilities in the state.
Point of Purchase Improvements
Inspec'oncallsforhea'ngequipmentorhotwaterheaterreplacement
• RequestENERGYSTARReplacement
• FortheHea:ngEquipment,makesureinsula:onlevelsareadequatebeforenew
equipmentisinstalledorsized.(Useoneofthefollowingpathstoupgradeinsula:on)
Inspec'ondoesn’tcallforreplacement…buts'llwanttoupgradeoraddSolar?
Conven'onalMortgage
Manydifferentwaystomakeupgradeswith
availablelowinterestproducts:
§  EnergySmartloans(Denver/Boulder/
Eagle/Pitkin/Gunnison)
§  FCUOn-billfinancing(Ft.Collins)
§  ColoradoEnergyOfficedeveloping
programtofillinStateprogramgaps
FHAorVAMortgage
UseEEMop:on,it’seasy!
Ifinspec:oncallforhea:ngreplacement,use
EEMOp:ontoupgradeinsula:onbeforenew
furnaceands t r e t c h thesavings
How Does an Energy Coach Help?
Ø  The home is a good candidate for a retrofit at point of sale, but it won’t happen
unless…
Ø  The real estate agent or home inspector provides a link to a network
Ø  The network provides an “energy concierge” service for most clients
Ø  The process must not delay mortgage closings
Home Assessment
•  Qualified local energy auditor
•  Help with selecting measures
Loan Options
•  Unsecured low interest loan
•  Not tied to mortgage, no
delay
Qualified Contractor List
•  Provide help with bidding
process
•  Ease the home buyer’s stress
720.865.5520
Verify Work
•  Home buyer can concentrate
on moving into the home, less
stress
Your Local Partners for Energy Savings
First Energy Authority in CO
10 local governments
Vision
To be the most efficient county in the country
Goals: By 2020
• 
• 
• 
20% per-capita energy savings
25% petroleum savings
35% electricity from renewables
Administered
By:
What Services are Offered for Homeowners?
• 
Low Cost Home EnergySmart Assessment(HERS Ratings Available*)
Ø Safety Checks & free energy saving installs
Ø Energy Saving Analysis
Ø Recommendations
• 
• 
• 
• 
Free Energy Coaching – make smart energy saving decisions!
Contractor Referrals and Assist with Bid Evaluation
Maximize all utility and local program rebates
Low Cost Financing for Upgrades – $1000-$25,000 – (only loans in
excess of $15,000 require deed security).
Insulation and Air-Sealing Really Work!
Say good-bye to this
Rebates for
Energy Star
Appliances and
High Efficiency
Equipment
And Hello to high efficiency heat!
Contact an Energy Coach to assist buyers, sellers or
property managers:
(970) 704-9200
Or
Visit: www.garfieldcleanenergy.org
to learn more!
Energy Coaching Map*
To obtain a Home Energy Score in these areas the utilities have provided subsidizes which
reduce the cost between $65 - $100.
* Some Counties shaded only have 80%
coverage of homes within counties
Energy Saving Mortgage Incentive
Who and What:
Ø  The Colorado Energy Office (CEO) can partner with any bank in Colorado to
offer a tiered incentive based on the Home Energy Score.
Ø  The incentive is a post closing mortgage credit, only the reservation needs
to be in place before the home closes. works with any mortgage product
Ø  Max credit is $3,000
To Qualify:
Ø  A home must have a Home Energy Score before closing
Ø  Existing homes must have a Home Energy Score and prioritize air sealing,
insulation, and heating equipment before moving onto other items.
Ø  Complete work within 120 days of closing and provide the CEO receipts
Existing Home Incentive Tiers
Existing Home Tiers:
Improvement of 1 bin : $750 benefit
Improvement of 2 bin : $1,500 benefit
Improvement of 3 bin : $2,250 benefit
Improvement of 4 bin : $3,000 benefit
No matching requirement
Home Energy Score
What is an Energy Efficient Mortgage?
Furnace issues
Attic
issues...
What is it:
Ø  It is a loan feature not an actual product.
Ø  It allows the home buyer or refinancer to add in the cost of many common
energy improvements into the mortgage.
Ø  All FHA and VA loans can use the features, but VA requires a HERS Index
Rating.
FHA’s Energy Efficient Mortgage (EEM)
Quick highlights:
Ø 
Any FHA lender can offer the EEM
Attic
issues...
Ø  No second appraisal is needed or additional down payment funds
Ø  Contractors and bids DO NOT have to be in place prior to closing
Easy Calculation to know the maximum amount:
Ø  The max EEM loan amount = the lesser of…
•  The Value x 5%, i.e. $12,250 for a $245,000 home
•  115% of the Median area price for County x 5%, or
•  150% of Freddie’s Conforming limit, x 5%
Financial Benefit
Traditional Calculation
Energy Saving Mortgage Calculation
Mortgage (lifetime of loan): $245,000
Energy Costs (annually):
$2,916
Base Loan Amount:
$245,000
+ Improvement Costs: +$11,000
- CEO Credit:
-$1,500
- Utility Rebates:
-$1,000
New Loan Amount:
Energy Costs (annually):
$253,500
$1,782
Broken Down Monthly
Mortgage (Principal & Interest): $1315
Monthly Energy Costs:
$243
Broken Down Monthly
Mortgage (Principal & Interest): $1361
Monthly Energy Costs:
$148
Total: $1,558 per month
Total $1,509 per month
Opportunities in Listings
Form, Function, Performance?
•  Any home built before 2006
Description for 215 W Eisenhower Boulevard Loveland, CO 80537
BACK ON MARKET. SOLD AS-IS. Great opportunity for 1st time home buyers or investors! Sweet equity with
needed TLC. All brick Ranch home in Loveland. Great neighborhood with nearby access to Lake Loveland,
city park & downtown. 1-car garage with additional carport parking, 2 sheds with AC/heat and electrical.
RV parking with alley access. Spacious Eat in Kitchen with a breakfast bar & cabinets galore. Easy access to
HWY 287 & HWY 34 for shopping & commuting. Don't procrastinate and wait show and sell..
Contact Information
For more information, please contact:
Peter Rusin, Residential Program Manager
Colorado Energy Office
303.866.2343
[email protected]