When you apply for a mortgage, underwriters look at various factors to determine your risk, such as credit score, debt-to-income ratio, loan-to-value ratio and reserves in the bank.
A new study suggests it may be time for them to consider if that house you plan to buy is energy efficient.
The study, done by researchers at the University of North Carolina and funded by a non-profit environmental group, found that people who buy energy-efficient homes are 32 percent less likely to default on their mortgage than the average borrower.
The research team used a national sample of about 71,000 mortgages for single-family homes - both new and old - that originated between 2002 and 2012. The average sales price was $220,000, so these were not just luxury homes.
Homes with an Energy Star rating were classified as energy-efficient.
Researchers accounted for all sorts of variables, such as the size and age of the house, the buyer's credit score, neighborhood income, the price of electricity, even the local weather. And the association between energy-efficiency and lower-risk of default, they say, was rock solid.
The results don't surprise Scott Bergford, owner of Scott Homes in Olympia. He's built about 300 energy-efficient houses around here. His houses sell for a premium, but in 30 years not a single buyer has defaulted.
"These are stable people who are interested in a lifestyle," he said.
The report did not look at why energy efficiency would equate to a lower risk of to the lender.
It could be the lower energy bills which give the family an extra $100 to $150 a month to spend.
Or maybe the people who buy energy-efficient homes are financially well off or very prudent with their money.
Home builders believe considering energy-efficiency in the underwriting process would result in more green homes being built, which would be good for the industry and the environment. Household energy use accounts for 20 percent of America's total energy consumption.