Overview
Title
To provide for accurate energy appraisals in connection with residential mortgage loans, and for other purposes.
ELI5 AI
H.R. 2413 is a plan to make sure people know how energy-saving features can make homes worth more money, and it tells banks to include these features when figuring out loans. It also wants to create a team to help make these rules work well.
Summary AI
H.R. 2413, also known as the "Getting Renewable and Energy Efficient Neighborhoods Appraisals Act of 2025," aims to improve how energy efficiency is considered during home appraisals for residential mortgage loans. The bill requires creditors to supply borrowers with disclosures about the opportunity to include energy reports in their home appraisals and emphasizes that energy characteristics could impact the appraised property value. It also mandates that appraisers consider energy features and efficiency as part of the appraisal process, and creditors must accommodate these considerations in their loan evaluations. Additionally, it proposes establishing an advisory committee to guide these processes and prescribes guidelines for implementing the section relating to energy reports.
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AnalysisAI
Overview of the GREEN Appraisals Act of 2025
The Getting Renewable and Energy Efficient Neighborhoods Appraisals Act of 2025, or the GREEN Appraisals Act of 2025, is a proposed piece of legislation aimed at integrating energy efficiency considerations into the appraisal process for residential mortgage loans. It mandates that creditors provide potential borrowers with specific disclosures about the role of energy reports in property appraisals. Additionally, it requires that appraisers take into account these energy reports when determining a property’s value. Several federal agencies, including the Department of Energy, are involved in setting guidelines and standards for these energy evaluations.
Key Issues and Concerns
Availability of Qualified Appraisers: The act sets out strict qualifications for appraisers, which include mandatory continuing education on energy reports. This requirement could potentially narrow the pool of appraisers, slow down the appraisal process, and create barriers for new appraisers entering the market. If courses offering this specialized training are limited, this could lead to higher costs and monopolies in those educational services.
Potential Market Bias: By requiring creditors to consider energy reports, the bill may inadvertently favor companies that specialize in producing these reports. This could lead to a concentration of power among these companies and potentially stifle competition.
Administrative Burdens and Costs: Creditors are tasked with new responsibilities, including providing energy reports and integrating them into underwriting processes. This increased burden does not come with clear funding mechanisms, which may result in higher costs for borrowers or lenders that may be passed down to consumers.
Privacy and Data Concerns: Although the bill provides for the portability of energy reports, it lacks explicit protections for borrowers’ data privacy. This gap could lead to risks in data security and misuse of personal energy consumption information.
Clarity and Public Understanding: The language in the bill is complex, particularly in its regulatory references and definitions. This complexity could hinder the general public’s understanding of how the bill could benefit them, potentially limiting its impact.
Impact on the Public and Stakeholders
The bill aims to improve the valuation of energy-efficient homes by ensuring that their energy-saving features are accurately reflected in appraisals. This could lead to higher property values for energy-efficient homes, benefiting homeowners and encouraging more sustainable building practices.
However, potential homeowners and the general public might see mixed effects. Those owning or seeking to purchase energy-efficient homes may benefit from higher appraisals. Conversely, those who seek homes not yet optimized for energy efficiency might face negative impacts if appraisals unfavorably compare them against newly structured norms.
Lenders and creditors might experience increased operational costs due to the required integration of energy reports and standards into existing processes. In the absence of dedicated funding or incentives, these costs could translate into higher interest rates or fees for borrowers.
Additionally, appraisers could experience career challenges or opportunities depending on the availability and cost of new education requirements. The specialized knowledge could enhance appraisers' expertise and career prospects, but only if they can readily access affordable educational opportunities to meet the new standards.
In summary, while the GREEN Appraisals Act of 2025 intends to promote energy efficiency through insightful property appraisals, the potential challenges and gaps within the bill could affect various stakeholders in significant ways. Careful review and possible amendments may be necessary to ensure that the bill meets its goals without unintended negative consequences.
Issues
The requirement for specific continuing education courses for appraisers, as mentioned in Section 2(a) and (6), could limit the pool of available appraisers and potentially create undue burdens if the courses are not widely available or are controlled by a few providers, raising concerns about market monopolization.
Section 2(c) and (4) create potential market bias by mandating creditors to consider energy reports which can favor entities that specialize in producing these reports, potentially leading to monopolization or favoritism.
Section 2(c) imposes an administrative burden on creditors to provide energy reports and ensure their availability and compliance with underwriting systems by March 1, 2026, possibly increasing costs without clear funding or support mechanisms.
The bill lacks a detailed mechanism for oversight or evaluation of the efficacy and fairness of the new appraisal requirements outlined in Section 2, specifically subsections (f) and (3), which may lead to inefficiencies or failure to achieve intended improvements.
Privacy concerns related to the portability of energy reports are not addressed in Section 2(e), leading to potential risks related to data protection and privacy.
The establishment of an advisory committee in Section 2(f)(2) lacks details on member selection, potentially allowing for bias and exclusion of important stakeholders in its formation.
Vague terms such as 'consideration of energy characteristics' in Section 2(d)(1) may lead to inconsistent interpretations in property valuation, potentially affecting appraisal outcomes and fairness.
The complexity of the language used in section 2(a) might hinder public understanding and access to the benefits described in the bill, limiting engagement and compliance from borrowers and appraisers.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The GREEN Appraisals Act of 2025 is the short title for this legislation, which officially is named the “Getting Renewable and Energy Efficient Neighborhoods Appraisals Act of 2025”.
2. Getting renewable and energy efficient neighborhoods accurate energy appraisals Read Opens in new tab
Summary AI
The bill requires that when applying for certain home loans, lenders must provide borrowers with information about how energy reports can impact property appraisals. Appraisers must consider these reports when evaluating a property's value, and the bill outlines guidelines for creating and using energy reports, involving agencies like the Department of Energy and other federal agencies.