HUD and USDA Announce Adoption of Minimum Energy Standards for New Homes
The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) announced the adoption of the updated Minimum Energy Standards for new single- and multifamily homes. These new standards are to expand housing affordability, minimize health risks, and improve the resiliencey of homes during extreme weather events.
“Many people have been caught by surprise when utility costs spike. Families should never have to find themselves making hard choices about whether to heat their home in winter or use cooling during a heat wave.” said Marion McFadden, Principal Deputy Assistant Secretary for Community Planning and Development. “The most cost-effective moment to invest in common sense energy efficiency is when you’re building a new home. These updates don’t just benefit the residents of these homes. They benefit us all by reducing carbon emissions that lead to climate change. Emissions savings from these standards is equivalent to taking 46,000 cars off the road every year.”
According to HUD, This Notice fulfills a statutory requirement under The Energy Independence and Security Act of 2007, which requires HUD and USDA to jointly adopt the latest energy standards, contingent on a determination that they will not negatively impact the affordability and availability of the covered homes. This Notice brings HUD into compliance with the statute.
The vast majority of HUD-financed units that will be built to the updated standards are single-family units, and the payback period—the amount of time it takes for homebuyers to start seeing savings through lower energy bills—for their homes is swift. As a result of the updated energy standards, energy efficiency improvements of 37% will cut energy costs by more than $950 per year, saving homeowners tens-of-thousands of dollars over the lifetime of the home. The upfront costs of the energy efficiency improvements can be rolled into an FHA mortgage, which means that after paying for their mortgage, taxes and insurance, families can put almost $400 back in their pocket every year, saving almost $25,000 over a 30-year mortgage or $15,000 after financing. In new multifamily housing that is four stories and above these standards save households $224 per apartment per year.
