(2) REPORT
REQUIREMENTS.—For the pur-
poses of paragraph (1), an energy efficiency report 
shall— 
(A) estimate the expected energy cost sav-
ings specific to the subject property, based on 
specific information about the property; 
(B) be prepared in accordance with the 
guidelines to be issued under subsection (a); 
and 
(C) be prepared— 
(i) in accordance with the Residential 
Energy Service Network’s Home Energy 
Rating 
System 
(commonly 
known 
as 
‘‘HERS’’) by an individual certified by the 
Residential Energy Service Network, un-
less the Secretary finds that the use of 
HERS does not further the purposes of 
this Act; or 
(ii) by other methods approved by the 
Secretary, in consultation with the Sec-
retary of Energy and the advisory group 
established in section 7(b), for use under 
this Act, which shall include a third-party 
quality assurance procedure. 
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(3) USE
BY
APPRAISER.—If an energy effi-
ciency report is used under subsection (b), the en-
ergy efficiency report shall be provided to the ap-
praiser to estimate the energy efficiency of the sub-
ject property and for potential adjustments for en-
ergy efficiency. 
(d) REQUIRED DISCLOSURE TO CONSUMER FOR A 
HOME WITH AN ENERGY EFFICIENCY REPORT.—If an 
energy efficiency report is used under subsection (b), the 
guidelines to be issued under subsection (a) shall require 
the mortgagee to— 
(1) inform the loan applicant of the expected 
energy costs as estimated in the energy efficiency re-
port, in a manner and at a time as prescribed by the 
Secretary, and if practicable, in the documents deliv-
ered at the time of loan application; and 
(2) include the energy efficiency report in the 
documentation for the loan provided to the borrower. 
(e) REQUIRED DISCLOSURE TO CONSUMER FOR A 
HOME WITHOUT AN ENERGY EFFICIENCY REPORT.—If 
an energy efficiency report is not used under subsection 
(b), the guidelines to be issued under subsection (a) shall 
require the mortgagee to inform the loan applicant in a 
manner and at a time as prescribed by the Secretary, and 
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if practicable, in the documents delivered at the time of 
loan application of— 
(1) typical energy cost savings that would be 
possible from a cost-effective energy upgrade of a 
home of the size and in the region of the subject 
property; 
(2) the impact the typical energy cost savings 
would have on monthly ownership costs of a typical 
home; 
(3) the impact on the size of a mortgage that 
could be obtained if the typical energy cost savings 
were reflected in an energy efficiency report; and 
(4) resources for improving the energy effi-
ciency of a home. 
(f) LIMITATIONS.—A covered agency shall not— 
(1) modify existing underwriting criteria or 
adopt new underwriting criteria that intentionally 
negate or reduce the impact of the requirements or 
resulting benefits that are set forth or otherwise de-
rived from the enhanced loan eligibility requirements 
required under this section; or 
(2) impose greater buy back requirements, cred-
it overlays, insurance requirements, including private 
mortgage insurance, or any other material costs, im-
pediments, or penalties on covered loans merely be-
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cause the loan uses an energy efficiency report or 
the enhanced loan eligibility requirements required 
under this section. 
(g) APPLICABILITY AND IMPLEMENTATION DATE.— 
Not later than 3 years after the date of enactment of this 
Act, and before December 31, 2016, the enhanced loan 
eligibility requirements required under this section shall 
be implemented by each covered agency to— 
(1) apply to any covered loan for the sale, or 
refinancing of any loan for the sale, of any home; 
(2) be available on any residential real property 
(including individual units of condominiums and co-
operatives) that qualifies for a covered loan; and 
(3) provide prospective mortgagees with suffi-
cient guidance and applicable tools to implement the 
required underwriting methods. 
SEC. 5. ENHANCED ENERGY EFFICIENCY UNDERWRITING 
VALUATION GUIDELINES. 
(a) IN GENERAL.—Not later than 1 year after the 
date of enactment of this Act, the Secretary shall— 
(1) in consultation with the Federal Financial 
Institutions Examination Council and the advisory 
group established in section 7(b), develop and issue 
guidelines for a covered agency to determine the 
maximum permitted loan amount based on the value 
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of the property for all covered loans made on prop-
erties with an energy efficiency report that meets the 
requirements of section 4(c)(2); and 
(2) in consultation with the Secretary of En-
ergy, issue guidelines for a covered agency to deter-
mine the estimated energy savings under subsection 
(c) for properties with an energy efficiency report. 
(b) REQUIREMENTS.—The enhanced energy effi-
ciency underwriting valuation guidelines required under 
subsection (a) shall include— 
(1) a requirement that if an energy efficiency 
report that meets the requirements of section 4(c)(2) 
is voluntarily provided to the mortgagee, such report 
shall be used by the mortgagee or covered agency to 
determine the estimated energy savings of the sub-
ject property; and 
(2) a requirement that the estimated energy 
savings of the subject property be added to the ap-
praised value of the subject property by a mortgagee 
or covered agency for the purpose of determining the 
loan-to-value ratio of the subject property, unless the 
appraisal includes the value of the overall energy ef-
ficiency of the subject property, using methods to be 
established under the guidelines issued under sub-
section (a). 
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(c) DETERMINATION OF ESTIMATED ENERGY SAV-
INGS.— 
(1) 
AMOUNT
OF
ENERGY
SAVINGS.—The 
amount of estimated energy savings shall be deter-
mined by calculating the difference between the esti-
mated energy costs for the average comparable 
houses, as determined in guidelines to be issued 
under subsection (a), and the estimated energy costs 
for the subject property based upon the energy effi-
ciency report. 
(2) DURATION OF ENERGY SAVINGS.—The du-
ration of the estimated energy savings shall be based 
upon the estimated life of the applicable equipment, 
consistent with the rating system used to produce 
the energy efficiency report. 
(3) PRESENT VALUE OF ENERGY SAVINGS.— 
The present value of the future savings shall be dis-
counted using the average interest rate on conven-
tional 30-year mortgages, in the manner directed by 
guidelines issued under subsection (a). 
(d) ENSURING CONSIDERATION OF ENERGY EFFI-
CIENT FEATURES.—Section 1110 of the Financial Institu-
tions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3339) is amended— 
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(1) in paragraph (2), by striking ‘‘; and’’ and 
inserting a semicolon; and 
(2) in paragraph (3), by striking the period at 
the end and inserting ‘‘; and’’ and inserting after 
paragraph (3) the following: 
‘‘(4) that State certified and licensed appraisers 
have timely access, whenever practicable, to informa-
tion from the property owner and the lender that 
may be relevant in developing an opinion of value re-
garding the energy- and water-saving improvements 
or features of a property, such as— 
‘‘(A) labels or ratings of buildings; 
‘‘(B) installed appliances, measures, sys-
tems or technologies; 
‘‘(C) blueprints; 
‘‘(D) construction costs; 
‘‘(E) financial or other incentives regard-
ing energy- and water-efficient components and 
systems installed in a property; 
‘‘(F) utility bills; 
‘‘(G) energy consumption and benchmark-
ing data; and 
‘‘(H) third-party verifications or represen-
tations of energy and water efficiency perform-
ance of a property, observing all financial pri-
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vacy requirements adhered to by certified and 
licensed appraisers, including section 501 of the 
Gramm-Leach-Bliley Act (15 U.S.C. 6801). 
Unless a property owner consents to a lender, an ap-
praiser, in carrying out the requirements of para-
graph (4), shall not have access to the commercial 
or financial information of the owner that is privi-
leged or confidential.’’. 
(e) TRANSACTIONS REQUIRING STATE CERTIFIED 
APPRAISERS.—Section 1113 of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3342) is amended— 
(1) in paragraph (1), by inserting before the 
semicolon the following: ‘‘, or any real property on 
which the appraiser makes adjustments using an en-
ergy efficiency report’’; and 
(2) in paragraph (2), by inserting after ‘‘atypi-
cal’’ the following: ‘‘, or an appraisal on which the 
appraiser makes adjustments using an energy effi-
ciency report.’’. 
(f) PROTECTIONS.— 
(1) AUTHORITY TO IMPOSE LIMITATIONS.—The 
guidelines to be issued under subsection (a) shall in-
clude such limitations and conditions as determined 
by the Secretary to be necessary to protect against 
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meaningful under or over valuation of energy cost 
savings or duplicative counting of energy efficiency 
features or energy cost savings in the valuation of 
any subject property that is used to determine a 
loan amount. 
(2) ADDITIONAL AUTHORITY.—At the end of 
the 7-year period following the implementation of 
enhanced eligibility and underwriting valuation re-
quirements under this Act, the Secretary may mod-
ify or apply additional exceptions to the approach 
described in subsection (b), where the Secretary 
finds that the unadjusted appraisal will reflect an 
accurate market value of the efficiency of the subject 
property or that a modified approach will better re-
flect an accurate market value. 
(g) APPLICABILITY AND IMPLEMENTATION DATE.— 
Not later than 3 years after the date of enactment of this 
Act, and before December 31, 2016, each covered agency 
shall implement the guidelines required under this section, 
which shall— 
(1) apply to any covered loan for the sale, or 
refinancing of any loan for the sale, of any home; 
and 
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(2) be available on any residential real property, 
including individual units of condominiums and co-
operatives, that qualifies for a covered loan. 
SEC. 6. MONITORING. 
Not later than 1 year after the date on which the 
enhanced eligibility and underwriting valuation require-
ments are implemented under this Act, and every year 
thereafter, each covered agency with relevant activity shall 
issue and make available to the public a report that— 
(1) enumerates the number of covered loans of 
the agency for which there was an energy efficiency 
report, and that used energy efficiency appraisal 
guidelines and enhanced loan eligibility require-
ments; and 
(2) includes the default rates and rates of fore-
closures for each category of loans. 
SEC. 7. RULEMAKING. 
(a) IN GENERAL.—The Secretary shall prescribe reg-
ulations to carry out this Act, in consultation with the Sec-
retary of Energy and the advisory group established in 
subsection (b), which may contain such classifications, dif-
ferentiations, or other provisions, and may provide for 
such proper implementation and appropriate treatment of 
different types of transactions, as the Secretary deter-
mines are necessary or proper to effectuate the purposes 
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of this Act, to prevent circumvention or evasion thereof, 
or to facilitate compliance therewith. 
(b) ADVISORY GROUP.—To assist in carrying out this 
Act, the Secretary shall establish an advisory group, con-
sisting of individuals representing the interests of— 
(1) mortgage lenders; 
(2) appraisers; 
(3) energy raters and residential energy con-
sumption experts; 
(4) energy efficiency organizations; 
(5) real estate agents; 
(6) home builders and remodelers; 
(7) State energy officials; and 
(8) others as determined by the Secretary. 
SEC. 8. ADDITIONAL STUDY. 
(a) IN GENERAL.—Not later than 18 months after 
the date of enactment of this Act, the Secretary shall re-
convene the advisory group established in section 7(b), in 
addition to water and locational efficiency experts, to ad-
vise the Secretary on the implementation of the enhanced 
energy efficiency underwriting criteria established in sec-
tions 4 and 5. 
(b) RECOMMENDATIONS.—The advisory group estab-
lished in section 7(b) shall provide recommendations to the 
Secretary on any revisions or additions to the enhanced 
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