The Federal Government is currently providing two incentive programs to residents of Massachusetts; Energy-Efficient Mortgages and a Residential Investment Tax Credit. According to the U.S. Department of Housing and Urban Development (HUD), Energy-Efficient Mortgages “provide the borrower with special benefits when purchasing a home that is energy efficient, or can be made efficient through the installation of energy-saving improvements.” The special benefits mentioned above are realized in many ways, and can be taken advantage of by both the buyer and seller of a residence.
For the buyer, this means an easy way to maximize the debt-to-income ratio by making possible the inclusion of energy saving measures, such as the installation of solar panels, to be financed as part of the mortgage. With a lower debt-to-income ratio, consumers can qualify for a larger loan which pays for a more efficient home that is less expensive to heat and cool, which, in turn, can increase the potential resale value of the home. For the seller, an energy efficient home, especially one that helps generate its own electricity, has the potential of selling more quickly since the bigger loans of this program make your home more affordable to more people, which is an undeniable advantage in a competitive market.
The second Federal Incentive is in the form of a Residential Solar Investment Tax Credit. This tax credit allows the taxpayer to claim up to 30% of their qualified solar installation costs between now and December 31, 2016. This program enables the individual taxpayer to use the credit to balance out their Alternative Minimum Tax liability. Best of all, according to the Database of State Incentives for Renewables and Efficiency (DSIRE) the excess credit generally may be carried forward to next tax year” and this excess credit can be carried forward until the end of the program in 2016.