LEED for Homes Illinois

The Appraisal Institute, the nation’s largest professional association of real estate appraisers, has made it easier to identify attributes of green homes. Last week, they released a form intended to help analyze values of energy-efficient home features. It is the first of its kind intended for appraisers’ use, and can identify LEED homes.

The new form is intended to be used as an optional addendum to Fannie Mae Form 1004, the appraisal industry’s most widely used form for mortgage lending purposes. Used by Fannie Mae, Freddie Mac and the Federal Housing Administration, Form 1004 is completed by appraisers to uphold safe and sound lending. Currently, the contributory value of a home’s green features is rarely part of the equation.

“This addendum is another example of how the Appraisal Institute is at the forefront of real estate valuation,” said Appraisal Institute President Joseph C. Magdziarz, MAI, SRA. “It will help the industry standardize the way residential energy-efficient features are analyzed and reported.”

The Appraisal Institute’s addendum allows appraisers to identify and describe a home’s green features, from solar panels to energy-saving appliances. Form 1004 devotes limited attention to energy efficient features, so green data usually doesn’t appear in the appraisal report, or it is included in a lengthy narrative that often is ignored.

Magdziarz pointed out that the Appraisal Institute’s form also will make it easier for appraisers to determine whether recent home sales should be used as comparable sales. Sales that are truly comparable are key components in determining a property’s value.

While the addendum won’t guarantee that an appraiser will raise a property’s value by tens of thousands of dollars for energy-efficient upgrades, it should guarantee at a minimum that energy improvements will be taken into account based on value adjustments consistent with local market conditions. More importantly, appraisers using the new addendum should be better equipped to identify accurate, area-specific comparable sales.

One of the interesting aspects of the form is the emphasis given to describing how renewable energy systems such as solar photovoltaic. The form has an area where data collected by the appraiser could easily be used to calculate the net present value (NPV) of the energy savings from a solar energy system.

It’s worth noting that this is an optional addendum to a traditional 1004 appraisal form. Hopefully the lending community will embrace this and builders, architects, lenders, appraisers, and other real estate professionals all find value in encouraging the use of this form for green homes.

Download the Appraisal Institute’s two-page green addendum at http://www.appraisalinstitute.org/education/downloads/AI_82003_ReslGreenEnergyEffAddendum.pdf.

Learn more about the form and how it will be used at a webinar on Nov. 17.

Builders of energy-efficient homes are now eligible for a business tax credit up to $2,000. This is retroactive to Jan 1, 2010 when the previous tax credit expired. Since every LEED home receives a HERS rating, this gives builders a great incentive to build green. Learn about this and other incentives for LEED.

In a newly-released report, the Alliance for Environmental Sustainability (AES) analyzed data from LEED-certified homes in the Midwest found that the homes averaged 40% less energy use and utility costs annually when compared to conventional homes.

LEED for Homes Case Study Report

From January through June 2010, the Alliance for Environmental Sustainability (AES) collected Read more » »

It’s no surprise that there are a lot of incentives out there for folks that are doing any remodeling that help encourage green strategies – everything from tax credits, tax deductions, rebates, grants,  municipal incentives, and more!  The USGBC Illinois chapter has been working on pulling much of this information together into an educational seminar that will be held Tuesday, Oct 19 in Chicago’s north suburbs. If you are a builder, designer or remodeler looking to capitalize on green building and better serve your clients, this is the event for you.

Read more » »

Here is an event many LEED for Homes professionals may be interested in. Note: Early bird registration ends on Friday, May 21.

Green/LEED Real Estate Conference – Grand Rapids

Thinking about building green?  Hear from the experts who can help you do it right.  Discuss practical considerations from a business and legal perspective. Read more » »

The Village of Northbrook has a great incentive program for green building. to promote Green building techniques in public and private sector construction projects, they are giving rebates for LEED-certified buildings.

Northbrook uses the LEED rating system to distinguish different levels of sustainability in construction projects. In turn, for building green, there is a rebate for Covered Permit Fees (permits issued by Northbrook’s Building & Development Department for new buildings, additions, demolitions, alterations and site work) based on the LEED rating of the project.

Bonus: if you’re one of the first LEED-certified buildings in a property class, the permit fee is completely waived!

So builders, what are you waiting for? Here is a link to Northbrook’s Green page, where Green Building Incentives are covered. Or click here to view the full green building incentive policy.