Podcasts helping Home Builders Sell more with the use of Home Builder Digital Marketing SolutionsFinding the Green for Your Green Building Project

Welcome to episode 109 of Selling More Homes: The Monday Morning Meeting. This Home Builder Digital Marketing Podcast features an informative discussion between Jerry Rouleau, Scott Stroud, and guest Dave Porter, a lending expert from PorterWorks.

PorterWorks trains mortgage underwriters and appraisers on how to take energy efficiency into consideration for mortgage applications. This helps those buying new homes to qualify for more money.

Mr. Porter has a background in the mortgage industry and has come to share his knowledge on this very important aspect of homeownership.

Sit back and enjoy the informative discussion on how green initiatives can help home buyers secure a mortgage.

Click here to listen to Episode 109 of Selling More Homes: The Monday Morning Meeting on Finding the Green for Your Green Building Project.

Contact us for more information on Digital Marketing and Web Design.

FULL TRANSCRIPT (with timecode)

00:00:01:12 – 00:00:18:01

This is the Selling More Homes podcast program number 109. This week, we speak with lending expert Dave Porter on the topic, finding the green for your green building project. And you’re listening to the Selling More Homes Media Network.

00:00:23:25 – 00:00:27:25

Welcome to Selling More Homes, the Monday morning sales meeting for Jerry Barlow.

00:00:27:27 – 00:00:59:20

I’m Scott Stroud. Every week we bring you interviews with sales and marketing professionals to help you find more buyers, close more sales, and earn more money in this challenging housing market. Whether you’re a realtor, builder, sales or marketing manager or new home specialist, this program has been designed just for you. Selling More Homes, the Monday morning sales meeting is a production of the Selling the More Homes Media Network. So get ready to listen, take notes and enjoy this week’s program.

00:01:12:09 – 00:01:40:15

Welcome to the Selling More Homes on the media network. I’m Gerri Willis. I’m Scott Stroud. Well, Scott, we had a great webinar here last week on public relations, so if anybody hasn’t had a chance to read yet, they can still do so. And Jerry, you did a good job of it. Well, it was that we got you coming up here in a week or so on how to use technology. So check our webinar series and check in on that.

00:01:40:21 – 00:01:47:16

We’re going to talk about the new tools that are available for how to use these tools to enhance marketing and to make more sales.

00:01:48:19 – 00:01:51:02

Well, Scott, who do we have for an interview this week?

00:01:51:08 – 00:02:26:22

This week, we’re going to be speaking with Dave Porter. And Dave has got a company called Porter Works. Dave comes out of the mortgage industry. So he’s going to kind of talk about what’s happening in the mortgage industry today, and particularly since that seems to be a tight spot with a lot of people. But he’s going to look at it from a different angle. Porter Works, his new company, trains mortgage underwriters and appraisers on how to take into consideration energy efficiency in the new homes that are being built and actually help people, help buyers to qualify for more money.

00:02:26:24 – 00:02:30:21

So he’s going to describe that program, how it works and how we can all become a part of it.

00:02:31:24 – 00:02:40:13

And you know, I remember a couple of years ago, he had just finished building his own green home and his wife had gone up in the northwest part of the US.

00:02:40:16 – 00:02:53:24

Exactly. In Washington state on the coast. And we interviewed Dave when I first met him, we were doing a program called the Green Building Journal, and he was one of the homes that we featured on on that program. So it’s nice to have him back.

00:02:54:18 – 00:02:56:17

I want to get him on the air here today.

00:02:56:20 – 00:03:04:03

OK, let’s do that. Dave welcome to our program, how are you today?

I’m good, thank you, Dave.

00:03:04:07 – 00:03:19:23

Dave, you’re with Porter Works for a company that you’ve recently founded and you’re offering a program called Green Lending Specialist. Tell us, first of all, a little bit about Porter Works and how you got or how you came to start the company and then what a green lending specialist is.

00:03:21:06 – 00:04:02:25

Well, thanks for your work, is a trading consulting solutions provider, and I am one of the victims. I was out forced out placed, I guess, working with a large mortgage company. I was a senior vice president and I actually took that as an opportunity to follow my passion. And my wife and I have started and are running Porter Works. And it is, again, primarily in the area of consulting and training for real estate companies, builder remodelers, lenders, appraisers and the general public.

00:04:03:07 – 00:04:19:11

A lot of it is on training and consulting and self management. But our key focus is on environmental issues, around building green and energy efficiency and then getting that message out to the various stakeholders.

00:04:19:25 – 00:04:28:21

You and I first met after you and your wife had constructed a green home yourself there in is it is it Oregon or Washington?

00:04:29:07 – 00:05:03:06

It’s in Washington. And in fact, people can still find out information about that award winning home. It’s called GoingGreenAtTheBeach.com. And we’ve had about twenty-six thousand unique visitors to that webpage and then got actually twenty-two hundred people have walked through the home if we’ve used it as an educational source. So it is a pretty deep green. It’s in Washington state, about one-hour North of Seattle and it’s called Going Green At The Beach.

00:05:03:21 – 00:05:24:01

And there was a great interview that we did about that house. Boy, it must have been a couple of years ago for the Green Building Journal. And you’ve moved forward now with your background in green and in lending and you’re now offering what would you call a green lending specialist program and some credentials that go along with it. Tell us about that.

00:05:25:10 – 00:05:56:08

So I thought that there was a major need, a major gap. What we’ve discovered is that builders have the opportunity to take the NAHB certified dream professional training. And so there is a way for builders and remodelers to get trained or they can take the lead training. And we’ve also seen that realtors have training. The National Association of Realtors have launched their dream designation program. And then there’s a group called Eco Brokers.

00:05:56:24 – 00:06:38:22

But what has been missing is any training specifically for lenders and appraisers. So we have created a deep dive, two-day class, and it goes through from A to Z on what is green building. And then we go through the current changes on the multiple listing. We talk about the rating programs and systems. We talk about what’s the latest with appraising green homes, lending on green homes and then the secondary market. And then how do you actually put it all together and and use it for not only being green, but also making some green.

00:06:39:12 – 00:07:10:03

So we’ve designed a designation course for it’s two days. It involves two examinations. And at the end, after these people successfully take and pass the test and find a code of conduct, then they are knighted, either green lending specialist or green valuation specialist. So it’s the same course with two different audiences and the evaluations that we’re getting back on the content and on the course have really been stellar.

00:07:10:21 – 00:07:25:06

Wow. Right now, I know the builders that are out there, they’re having a hard enough time just getting regular financing. Is there special financing available for green homes and those that are certified under the either the NAHB program or other programs?

00:07:25:27 – 00:08:00:09

Well, there is no such thing as a green mortgage, although if you Googled it or or did a search, you’d find lots and lots of different things popping up. But at the end of the day, there’s no secondary market recognition for a green mortgage. But the energy efficient mortgages continue to exist. I mean, FHA and VA and Fannie Mae and Freddie Mac all have their own renditions of energy efficient markets and then for retrofit energy improvement mortgages.

00:08:00:25 – 00:08:32:05

So these programs are there. And now with what I call the normalization of lending, where they’re looking for down payments and they’re looking for jobs and they’re keeping the debt ratio in line, there is an important need to have every tool in your toolbox. So we’re telling lenders that this is an opportunity to open up the home buying power for consumers, and frankly, it’s the right thing to do. I mean, Scott, you and I both step back and look at lending for just a second.

00:08:32:15 – 00:09:11:05

It’s really kind of crazy when you think that a lender will look at your income and they look at your debts and they look at the house payment and they tell you, based on your income and your debts, how much of a house payment you can make and whether you’re buying a 1968 house that’s bleeding energy that cost 400 or 500 dollars a month to feed in energy costs or you’re buying an energy star, you know, Bill Green, NEHTA, LEED, Gold or Platinum or in other words, a deep green or even a green home.

00:09:11:15 – 00:09:34:07

The difference in the utility cost alone is significant. So I believe that lenders should be considering what I call PITIUM, principle, interest taxes, insurance and utilities and maintenance. I think fundamentally there’s a reduced risk if the utility costs are lower.

00:09:35:19 – 00:09:47:02

Now, are there programs then in place right now from lenders that do take utilities and maintenance into consideration and give credit back to the buyer or the homeowner for energy efficiency?

00:09:48:10 – 00:10:26:13

Yes, those programs exist, unfortunately, you know, we have to look at all the refinances and look at all the first time homebuyers and unfortunately, very, very, very few of those people are being offered the energy efficient mortgages. Either the lenders don’t know about them, which is usually the case, or some don’t care. But it’s an important tool. And this is not going away. I tell lenders, whether you drink the green Kool-Aid or not, this is a huge business opportunity for them to get involved and do some good.

00:10:26:19 – 00:10:52:29

And frankly, it’s a great way to increase your income as a lender. As both the lenders and the appraisers need this training, there are some new tools for appraisers. Most of them don’t know about the tools that are out there and that will help everybody. So I think the appraisers want to appraise these homes, but they’re not aware how to do it. And so it’s very, very important that they get this training.

00:10:53:25 – 00:10:57:05

And that’s the training that you’re offering now through your two-day course.

00:10:58:09 – 00:11:08:00

Yes, and we’re launching nationally, we’ve done a few classes, we just got done with Portland, Oregon. We’ll be doing a class during the same window of time of the International Builders Show in Vegas. People can find out about the class by going to either greenlendingspecialist .com or greenvaluationspecialist .com.

00:11:27:09 – 00:11:53:02

OK, now I want to explore a little bit more about what everybody needs to know about how to accommodate a green home, let’s say I’m a builder and I’ve built to the NHP gold standard. And so I’ve got a very energy efficient home. Now I’ve got a client that’s ready to buy that home if I place them with an energy efficient mortgage. How is that specifically going to help that homebuyer?

00:11:54:07 – 00:12:02:19

Well, what will happen is that that home has met certain criteria, and so the home has a rating.

00:12:02:28 – 00:12:42:24

It’s called a herd rating. Stand by someone who is part of the resnet team. But there is a high energy rating that is done on the home and what it will do is it will compare a regular home against this new Energy-Efficient home and they’ll look at the differential and they’ll look at the dollar savings and depending upon which loan program you’re going with, whether it’s FHA or VA or conventional, but it’s looked at differently, but in a conventional way, they actually will take the energy savings and add it to the consumer income.

00:12:43:01 – 00:13:16:09

It’s just like you just got yourself a raise because you’re buying energy efficient home. And so different programs have different ways of looking at the income. Energy savings can actually then be added and so they can qualify for maybe a little bit more home or a better quality home. So the programs exist. It does include having the home rated and because we need that third party report that then goes in, you know, just to share a piece of information.

00:13:16:11 – 00:13:54:20

But what I would encourage all the listeners that are out there is to is to work with their local multiple listing services, have your realtor association and your builder association rally on this point, and get the multiple listing services to have checkboxes around these green homes so that you can actually see that if you need to be green or its leasehold or whatever it is and you need or Energy Star, and we need that on the check list because that will help get the evidence to the appraisers and then we can start to track the performance of this.

00:13:55:03 – 00:14:30:09

The initial research is saying that these homes are performing very, very well. They sell faster and for more dollars per square feet. But if we can take that all the way back to prove that these homes are performing better, have loans, then we can actually create a true green mortgage. So a little bit goes a long way. Unfortunately, most buyers are not aware of. Most lenders are not aware of them. And we really either need to, I hope, by market driven, you know, I want lenders to sign up for this.

00:14:30:18 – 00:14:47:13

But short of that, it may need to take some legislation or a document where the lenders are needed. They need to offer these to the buyer. So maybe the answer is some sort of document and a loan file that says the buyer has been told about energy-efficient mortgages.

00:14:48:10 – 00:15:11:00

Interesting. There’s there’s a lot to wrap our heads around. Here you go back to you mentioned an initiative from local homebuilders associations, the realtor associations, to recognize green as part of the characteristics of a home. Are there areas in the country where that’s being done that that maybe set a model for other associations?

00:15:11:19 – 00:15:43:08

Yes, it’s actually a very good question. I know that Portland, Oregon, Seattle, Washington, Carver City, Michigan. There are several cities and states that are getting into this. And the National Association of Realtors actually have a resource page for multiple listing groups that want to add these features. So there’s actually toolkits that are being built to help organizations kind of spur this along.

00:15:43:21 – 00:16:16:17

So I wish I could say it’s as simple as having your lender offer it, but we need several pieces to the puzzle to be met. But what your listener certainly can do, your builders and your remodeler is say to your lender, hey, are you certified and have you gotten the green lending specialist designation? Have you taken the classes to give me a full report on the advantages of the Energy-Efficient Mortgages? And if they can’t, they really need to either take my course or some other course.

00:16:17:07 – 00:16:40:16

I’m just not aware of anything that goes as deep as ours. And appraisers to, you know, a builder can call out for competency of an appraiser. And so if an appraiser has not been trained on green, then how can they appraise a green home? And so I think that’s part of the problem. And part of the solution is to get them some formal training.

00:16:41:01 – 00:17:05:12

That’s a good point that you make there, that they that if they don’t know, how can they fully appraise it? So we’ve talked about the appraisers and the class that you have for them and for lenders. If a lender were to come in and become certified through your course, would that be the underwriters themselves that then would become aware of it and would because those are the guys that make the make the final decisions, aren’t they?

00:17:05:14 – 00:17:38:11

So I think it’s a very insightful question because I think a lot of people, when they think about a lender, they might think of the originator, the person who takes the loan, and they need to know about it, because if they don’t offer it to the consumer and start the paperwork and understand the process it’s never going happen. But yes, absolutely, at the end of that file, once it’s been underwritten by the lenders underwriter, that person needs to understand this as well.

00:17:39:01 – 00:18:14:12

They review the appraisal so they only understand that component and they certainly need to understand the energy efficient mortgages. Most of the time, the reason why these are not being offered is that they see them as complex and they don’t understand them. And so they it’s easier just to kind of ignore them. But I know several people that are doing them and they’re getting more and more popular. And I even saw that Vice President Biden and his call for the recovery.

00:18:15:09 – 00:18:50:00

There is a specific callout about energy efficient mortgages. It’s called the recovery through Retrofit Middle Class Task Force Council on Environmental Quality. And it is in that document that they actually call for improving energy efficient mortgages. So not only do we need to use the tools that we currently have, we need a streamlined, energy efficient mortgage. I mean, you know, if you stop and think that out of one hundred and twenty-eight million homes, 95 million of them need energy improvements.

00:18:50:12 – 00:19:27:11

And so this may be is a conversation for your remodeler listeners. But, you know, there’s a huge opportunity about retrofitting existing housing stock. New homes continue to be more and more built, the energy standard. And those buyers should be able to take full advantage of those energy improvements and be able to get qualified for better loans that way. But the retrofitting is where huge opportunity is. We could put people back to work. We can lower the overall cost of operating back home, and it’s better resale value, better collateral for the lender.

00:19:27:21 – 00:19:33:11

So it’s a trifecta of wins and we just need to get the word out.

00:19:34:16 – 00:20:04:21

That’s becoming obvious to me that it is, as you say, a trifecta of wins because it seems like everything comes down to this that mortgages that recognize energy efficiency and credit the homeowner with and with the way I take it this happens is that any savings that you get above average would go back and be credited to you as income so that you can now qualify for a loan that has a bigger mortgage which would pay for the green improvements. Is that correct?

00:20:05:29 – 00:20:36:19

Well, that is true of the Fannie Mae and Freddie Mac. FHA will be a herd report and they just want to make sure that the energy improvements that have been done to the new home of the proposed energy improvements that the HERF report called out for, for the retrofit, the existing home that needs energy improvement as long as the energy savings on a monthly basis outweighs the cost of the improvements. And usually that’s the case.

00:20:37:14 – 00:21:09:21

The only case that it might not work is when you have very, very expensive high retrofits that may not be able to fill out. But for the most case, you’re simply looking at the ability to pay for those improvements within the mortgage, the amortization. And so often, most times there’s not a problem at all. And what it costs to make the improvements more than pays for the mortgage, people actually save more money, if that makes sense.

00:21:09:28 – 00:21:37:10

It does. It makes it makes great sense. And it should do to all of our listeners, particularly those in construction and in remodeling as well as the lenders. So you’ve given us some some rallying points that our listeners can take to their local associations in the MLS and see what they can do there. What’s the next step for those builders, lenders, remodelers that are listening right now as well as the salespeople? What’s the next step for them? What what can they do to become involved?

00:21:38:02 – 00:21:44:07

Please write to your senator, to your congressman, reach out and comment. This is a historic opportunity and call out for a streamlining of the energy efficient mortgage.

00:21:54:05 – 00:22:28:07

It could be perhaps simplified and fast track call out or perhaps legislation that would require lenders and appraisers to get the training that they need or certainly to encourage it. This is so critical. And talk about a stimulus check. I mean, what we can do here, if this is like every year people get a stimulus check and we don’t go into more debt as a nation, we are relying less on foreign oil is good for our economy.

00:22:28:16 – 00:22:44:11

We’re using less of our precious resources. And and people are saving money every month. And that money can then go back into the economy. So there’s some major plays here. If we would simply stop and capture the opportunity.

00:22:44:21 – 00:22:52:10

Wonderful. To become involved with your certifications as a green lending specialist, how would we do that?

00:22:53:12 – 00:23:28:21

You would register for a course you can find us greenlendingspecialist .com or greenvaluationspecialist .com. And we are scheduling courses, but we are also doing exclusive. We’re getting calls from lenders across the nation and they are asking for an exclusive training or a group of appraisers. So we’re happy to schedule exclusive trainings around the nation. And I sure appreciate your interest in this topic and helping helping get the word out.

00:23:29:24 – 00:23:42:00

It’s been my pleasure. David, thank you for joining us here. We’ve been speaking with Dave Porter with Porter Works and greenlendingspecialist.com. Dave, thanks for being our guest. Thank you again.

00:23:47:14 – 00:24:04:07

Well, Scott, you know, the concept with the green financing, I think a lot more financing companies should be able to look at that because it means so much on the individual monthly payments for electricity and pooling and everything else.

00:24:04:19 – 00:24:20:07

It only makes sense if you’re looking into a person’s capacity to pay back a mortgage loan. And because of the energy efficient factors into a home, they’re paying less on maintenance. Well, that leaves more money to go back into a mortgage as well as other things. So it makes perfect sense.

00:24:21:00 – 00:24:35:18

Yeah, and I think the banks, hopefully with the pressure of the of the builders and the National Association of Home Builders and some of these national green programs will probably get some of the bankers who maybe look at this from a different perspective.

00:24:35:22 – 00:24:42:10

Yeah. And government incentive programs that are there to push energy efficiency. That’s a big topic, not just in homes, but everywhere.

00:24:43:16 – 00:24:53:25

Coming up in a week or two here, as I mentioned earlier, I’m anxious to hear your program on, you know, using new technology and some of the new tools to enhance our business.

00:24:54:02 – 00:24:55:10

Yeah, that’ll be next Wednesday.

00:24:56:02 – 00:25:06:04

Yeah. Looking forward to your program on that. And now our year is winding up here and we have a this is active schedule for next year. So I’m looking forward to that.

00:25:06:06 – 00:25:24:25

Also coming up, I am very excited about some of the things that we’ve got planned for 2010 as the market recovers and people are getting back into a more positive attitude while we’re there with a bunch of new products and programs that are going to help you to be your best in sales.

00:25:26:16 – 00:25:33:17

Great. Well, until next week, Ontario, hello, I’m Scott Stroud. Exposed the weakness of selling our home media network.