By Ray Birch
AUSTIN, Texas—There’s more than $369 billion in savings waiting to be taken advantage of by members who take green loans, and all credit unions have to do to help their borrowers get their share is provide a little additional education about the more than a half-million incentives available, according to one company.
It's an opportunity that’s being missed by credit unions even though offering the loans helps to position a CU as a strong resource for its members, in addition to the revenue from the lending, according to New Vista Solutions. To that end, the company said it has introduced two new reports credit unions can use to educate members on the incentives available hat can also help market a credit unions green loan offerings.
“These are incentives waiting to be claimed,” said CEO Jesse Rivera. “The Biden administration has enacted the Inflation Reduction Act legislation that puts our country on a net zero emissions path by 2050 and invests billions of dollars over the next decade in clean energy. Not only will these initiatives be implemented across the federal government, but industry and households will be urged to utilize green energy and green energy innovations, as well. State and local governments are also mandating new building codes that include solar energy, water conservation, and other energy conserving or efficiency components for commercial and residential properties.”
$70 Billion Available
Rivera noted that each year approximately $70 billion is available in the form of incentives—such as tax credits, rebates, grants, subsidies, and more—for incorporating green energy into not only new home and commercial building projects, but also renovations and upgrades to existing properties.
“Over 50% of these incentives go unclaimed every year. Fannie Mae and Freddie Mac are now offering green programs, as well,” Rivera noted. “From the residential real estate borrowers’ perspective, with energy and water bills rising, homeowners now focus on what they can do to reduce these costs. Homeowners can easily capture cost savings from incentives that can pay for a significant portion of their home improvement project when they install energy-efficient lighting, appliances, HVAC, water conserving equipment or landscaping, solar….”
Commercial Lending Opportunities
Commercial property owners, Rivera noted, often need to upgrade properties to not only attract and retain tenants, but also to reduce monthly electric and water costs.
“Building owners and developers can capture cost-savings from energy efficiency as well for both renovations and new construction projects,” Rivera said.
Rivera emphasized that education is needed because consumers don’t know where to go to get these incentives.
A Lack of Awareness
“It’s a lack of awareness,” he said. “We have the resources lenders can put on their website to educate borrowers and show how the incentives can help them immediately and long-term. There are incentives for electric cars, for home insulation, for windows…The list is long.”
New Vista Solutions is offering a Green Report and a Quick Summary that the company said credit unions can leverage to market to their members and use to promote loans that provide financing for construction and renovation projects that incorporate green energy components.
“The Green Report and Quick Summary connect credit unions and their members to over 540,000 incentives,” explained Rivera. “The Quick Summary summarizes incentives available to property owners and gives them the ability to upgrade to the Green Report, which walks property owners through capturing their incentives.
Adding Value
“The Green Report adds value to a credit union’s suite of consumer and commercial services,” continued Rivera. “Since many property owners are not aware that incentives exist for most construction and home improvement projects, introducing loan prospects to this report positions the credit union as a valuable source of cost-saving information and differentiates themselves from their competition.”
The Quick Summary costs $10. The Green Report comes with a $25 fee for residential borrowers and $500 for commercial. CUs can choose to pay the cost for each report, or pass it along to borrowers, Rivera said. The information is accessed online.
“Credit unions can offer their loan prospects a money-saving value-add, and property owners save money on their energy-efficient projects,” said Rivera. “It is a win for both credit unions and their members.”
Additional Benefits
The move brings with it additional benefits for the credit union, said Rivera.
“Energy-efficient properties in a credit union’s portfolio improves their bottom line,” he said. “A recent university study reported that owners of energy-efficient homes are 32% less likely to default on their mortgage. Properties that are more resilient against catastrophic weather are less likely to need costly repairs or replacement. This is a loss-mitigation win for credit unions.”
Rivera added that the data show properties with higher energy efficiency ratings are more likely to appraise at a higher value than those with lower ratings.
“Higher appraised value means lower loan-to-value ratios, and less exposure for credit unions,” he said.
For info: green.newvistasolutions.com