HERS ratings…Objectives and history:
One of the primary services that Horizon RES NH offers is a Home Energy Rating Service. (HERS)
HERS ratings are objective assessments of any new or existing homes’ thermal and energy use profile. ENERGY STAR home certification, new home energy code compliance, energy efficiency mortgages and multiple listing services (MLS) all use HERS ratings to some degree to define the energy profile and energy operating costs of residential buildings.
Home energy ratings date back to 1981, when a group of mortgage industry leaders set up the National Shelter Industry Energy Advisory Council. Fannie Mae, Freddie Mac Federal banks and Real Estate appraisers were all part of the original initiative. The Council’s goal was to establish a measurement system which factored the energy efficient features of a home into the mortgage loan.
Energy Mortgages also date back to the early 1980s when Fannie Mae, Freddie Mac, the U.S. Department of Housing and Urban Affairs’ Federal Housing Administration (FHA) and the Veteran’s Administration (VA) all adopted energy mortgage programs. However, these programs were not widely used for a variety of reasons: a lack of consumer and lender awareness, no uniform method of efficiency evaluation (except in a few states with home energy rating systems) and complicated program procedures.
In 1990, the National Association of State Energy Officials asked the U.S. Department of Energy to work with the states, to develop a nationwide network of home energy rating systems that will encourage uniformity in the development and operation of HERS systems. In response, the Department of Energy and the Department of Housing and Urban Development formed a national collaborative on home energy ratings and energy mortgages in 1991.
Realtors, builders, appraisers, consumer and environmental groups, and the secondary mortgage market collaborated on the effort. The following year, the collaborative issued its recommendations calling for a national uniform system of voluntary home energy ratings and energy mortgages.
The recommendations were included in several pieces of legislation passed by Congress that year:
- The National Energy Policy Act of 1992 required the Department of Energy to promulgate voluntary guidelines to encourage the adoption of home energy ratings in all states after consultation with the states, operating home energy rating systems and the secondary mortgage market.
- The Housing and Community Development Act of 1992 required the Department of Housing and Urban Development to test a pilot energy efficient mortgage program in five states.
- The Veterans’ Home Loan Program Amendment of 1992 required the Veteran’s Administration to adopt a national energy efficient mortgage program for its veteran home loan program.
HUD selected Alaska, Arkansas, California, Vermont and Virginia to pilot its energy efficient mortgage, FHA program in 1993. The FHA program was expanded nationwide in 1995. Fannie Mae selected Colorado to pilot its energy efficient mortgage effort the same year.
In 1993, the Department of Energy contracted with the Home Energy Rating System Council (HERS® Council) to develop voluntary technical guidelines for home energy rating systems. A joint task force of the NASEO and HERS Council technical committees developed a consensus recommendation of a technical standard. This recommendation was the basis of DOE’s proposed guidelines in its 1995 notice of rule making. Because a dispute between competing utility issues over fuel neutrality, DOE never adopted the proposed standard. Using the recommendations of the joint RESNET/HERS Council Task Force the National Association on September 19, 1999, adopted technical guidelines that addressed the fuel neutrality issue.
In October of 1993, the Clinton-Gore Administration announced its Climate Change Action Plan in compliance to the Rio Accord. The Climate Change Action plan included a provision for making home energy ratings and energy mortgages available nationally. In 1995, DOE selected Energy Rated Homes of Alaska, Inc., Energy Rated Homes of Arkansas, Inc., California Home Energy Efficiency Ratings, Inc., Energy Rated Homes of Colorado, Energy Rated Homes of Mississippi, Inc., Energy Rated Homes of Vermont Inc., and Virginia Home Energy Rating Organization, Inc. to provide support for the national home energy rating effort.
In April 1995, the National Association of State Energy Officials and Energy Rated Homes of America founded RESNET to develop a national market for home energy rating systems and energy mortgages. RESNET’s activities are guided by a mortgage industry advisory council composed of the leading national mortgage executives.
In October 1998, the mortgage industry, RESNET and National Association of State Energy Officials adopted the Mortgage Industry National Home Energy Rating System Accreditation Standard. Fannie Mae and Freddie Mac adopted the national accreditation standard.
After more than a decade of development, the infrastructure needed to make energy efficiency a standard feature in the nation’s housing market is in place. Across the nation, states, in partnership with their housing industries, are forging the public/private partnerships required for successful home energy rating systems. RESNET is providing the technical, program and marketing assistance required for this effort.
Follow this link for more information on the definition, benefits and process of HERS ratings.