GREEN Appraisals Act of 2025

Bill Summary: GREEN Appraisals Act of 2025 (H.R. 2413)

Overview

The Getting Renewable and Energy Efficient Neighborhoods (GREEN) Appraisals Act of 2025 is designed to ensure that energy-efficient upgrades and renewable energy features of residential properties are formally recognized and considered during the home appraisal process. By integrating "energy reports" into the mortgage underwriting process, the bill aims to provide homeowners with a more accurate market valuation that reflects the financial benefits of energy efficiency.

Main Purpose and Intent

Currently, many energy-efficient home improvements (such as solar panels, high-efficiency HVAC systems, or advanced insulation) may not be fully captured or valued in a standard home appraisal. This bill intends to standardize the use of energy reports to ensure that these features are factored into a property's value, potentially increasing the home's appraised value and assisting borrowers in securing more favorable loan terms.

Key Provisions

1. Borrower Disclosures and Rights

Creditors must provide a written disclosure to borrowers stating that:
* They may provide an energy report to the creditor or appraiser for consideration.
* They have the right to request an energy report for the property.
* The appraiser will consider the report, though the final valuation could be higher, lower, or unchanged.
* The data in the report may impact the borrower's ability to obtain a loan.

2. Requirements for Appraisers

To be considered a "qualified appraiser" under this Act, the professional must:
* Be licensed/certified in the property's state.
* Complete at least 7 hours of continuing education specifically on how to consider energy reports in appraisals (including a passed examination).
* Be competent to perform the specific assignment.

3. Integration into the Loan Process

• Mandatory Consideration: If an energy report is provided, the qualified appraiser must take it into account, focusing on energy efficiency characteristics, renewable energy features, estimated energy savings, and relative energy consumption compared to similar homes.
• Implementation Date: Starting March 1, 2026, creditors must provide these reports to appraisers upon assignment (with borrower consent).
• System Updates: Within two years of enactment, creditors must update their underwriting and scoring systems to accommodate appraisals that factor in energy reports.

4. Standardizing Energy Reports

The bill defines "energy reports" as analyses detailing energy features and costs. These reports must be conducted via approved methods, including:
* HERS (Home Energy Rating System).
* The Department of Energy’s Home Energy Score.
* Other methods approved by the Secretary in consultation with the Secretary of Energy.

Affected Parties

• Homeowners/Borrowers: Can potentially see an increase in home value and gain better transparency regarding their home's energy efficiency.
• Appraisers: Must undergo additional specialized training to remain "qualified" for these loans.
• Creditors/Lenders: Must update disclosure forms and modify underwriting/origination software.
• Covered Agencies: The FHA, FHFA (Fannie Mae/Freddie Mac), Ginnie Mae, Rural Housing Service (USDA), and the VA are tasked with overseeing and enforcing these requirements.

Procedural Details

• Timeline: Key requirements for creditors to provide reports to appraisers begin March 1, 2026. System wide updates for underwriters must be completed within two years of the bill's enactment.
• Governance: A joint advisory committee consisting of housing advocates, energy experts, architects, and lenders will be established to help the covered agencies create implementation guidance.