HouseKeys - 07/26/2007 (Plain Text Version)

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First Home Purchase 101: The Financial Preparation Basics

What sort of advance financial preparations should you make before buying your first home?

Taking time to organize your finances can be the key to making your homeownership dreams a reality.

You've read all the headlines about problems in the home real estate market.

You’ve also read that, compared with 12 and 24 months ago, home prices today in dozens of areas around the country are a lot more affordable than they had been.

So you make the decision to buy a house — your first. What sort of advance financial preparations should you make before proceeding?

Here’s a quick guide to the key questions.

Number One: How much house can you really afford to buy, and how do you go about making that determination?

Years ago, the rule-of-thumb answer was very simple: You could afford a house that cost twice your annual household income, assuming you made a standard 20 percent down payment.

Today, the computation is a bit more complex, and down payments can be minimal or even zero. Most lenders and mortgage websites can provide easy-to-use calculators that help you figure out what size mortgage you can afford at current interest rates. Key factors that will affect the results include:

Your debt-to-income ratios.

As a general rule, many lenders offering mortgages at “prime” interest rates will expect you to spend no more than 28 percent of your monthly gross household income on your housing-related expenses — your mortgage principal and interest, property taxes and insurance.

Those same lenders typically will also expect that your total monthly debts — your credit card payments, student loan payments, car payments PLUS your mortgage payments — not exceed 36 percent.

These can be tough standards to meet, so most lenders have programs designed for first time buyers that will allow you a lot more flexibility on your debt ratios. Sometimes they can go as high as 45 to 50 percent for your total household debt and 35 percent or more for your housing expenses.

Bear in mind, however, that lenders typically will charge you an interest rate that is higher than their “prime” rate in exchange for that flexibility.

Amount you have for a down payment.

Almost no first-time buyers have the ready cash to make down payments higher than 10 percent these days, and many put down less than 5 percent. Here again, there’s a cost. Whenever you put down less than 20 percent, most lenders will require you to obtain private mortgage insurance or FHA (government-backed) mortgage insurance coverage. These premiums usually are paid along with your monthly principal and interest, and raise your total monthly costs.

The closing and escrow costs.

First time buyers doing their advance financial preparation work sometimes overlook the settlement fees and escrow charges that come with a mortgage, and can add 2 to 4 percent onto the total expense of buying a house, depending upon the location. These fees — due and payable at the time of closing the loan — range from lender fees to title insurance, local taxes, and the administrative charges for processing and completing the entire transaction.

If you don’t have cash available beyond the down payment, many lenders will allow you to finance most of the closing costs — pay for them over time — in exchange for a slightly higher interest rate. Typically the increase in rate will not exceed one quarter of one percent.

Number Two: How good is your credit profile?

Months — not weeks — before you start shopping seriously for a home or mortgage, you need to check your credit thoroughly. This is an essential step because, in the eyes of a lender, your credit history and credit score will govern everything — how much you’ll be charged in interest and fees, and even whether you qualify for a mortgage in the first place.

The three national credit bureaus — Equifax, Experian and Trans Union — maintain ongoing credit files on more than 100 million Americans. Odds are they each have a file on you. You can obtain a free copy of your credit report from each bureau once every 12 months by visiting www.annualcreditreport.com. The site is run jointly by the three bureaus. You can also purchase copies of your reports any time at each of the bureaus’ websites.

When you obtain your credit files, examine them carefully. Many files contain erroneous or outdated information. Sometimes they confuse one person with another because of similar names or Social Security numbers. Other files are incomplete because creditors fail to report borrowers’ on-time payment histories or only report to one or two of the bureaus.

If you find incorrect or missing information, contact the creditor immediately and request a correction. Under federal law, the bureaus are required to maintain consumers’ files accurately. If a creditor fails to correct misinformation promptly, contact the credit bureau and request that it contact the creditor to resolve the issue.

What is in your files determines your FICO score, and that score almost always will determine the interest rate you are quoted by lenders. Consumers with low scores — especially under 620 — get hit with high rates and fees. If your score is between 700 and 850, you should be quoted the very lowest rates and fees available. (Visit myFICO Credit Scores for helpful guidance on FICO scores and interest rates.)

What if you haven’t had much experience with the traditional world of credit or banking? What should you do if your FICO score is artificially depressed because your credit file is “thin,” making you appear to be a much worse credit risk than you know you are? Happily, growing numbers of lenders now offer loan programs where so-called “non-traditional” credit information — payments such as monthly rent and that are not reported to the national credit bureaus — can substitute for or be added to traditional credit histories to raise your scores.

Number 3: How much of a loan can I be pre-approved for?

Once you’ve got your credit situation in order, the final key step is to get approved in advance for a loan. This is important because the pre-approval process will give you a hard and fast indication of the loan amount you can count on. That, in turn, will provide you an upper limit on the cost of the house you can buy. If the approved mortgage amount is $350,000, and you’ve demonstrated to the lender that you can afford a 5 percent downpayment, that means you are pre-approved to buy a house costing as much as $367,500 (ie., a downpayment of $17,500 and a loan amount of $350,000).

Pre-approvals are essential in today’s market because they tell everyone that you are for real, that you are serious AND financially capable to buy. That’s a written assurance that you can literally take to the bank.

Ken Harney is a nationally known columnist on real estate for the Washington Post Writers Group. His award-winning column, "The Nation's Housing," appears in newspapers in more than 100 major cities across the country.

This article cannot be reprinted without permission from the author.

It’s Gettin’ Hot in Here! Tips for Keeping Cool This Summer

As temperatures rise this summer, follow these tips to keep cool.

With summer upon us and temperatures on the rise, most of us start seeking out retreats from the heat. While you may not be able to do anything about the heat outside, you can do something about staying cool and comfortable in your own home. With some simple tips you’ll find the best ways to stay cool this summer and save money on your energy bill at the same time.

Air-Conditioner Maintenance

Don’t get stuck in the unpleasant predicament of having your air-conditioner go on the fritz on a hottest day of summer. Like any major household appliances, air-conditioners need regular maintenance to work efficiently.

Hire a contractor to service your HVAC unit annually prior to use to ensure that everything is in proper working order.
Make sure that ducts in your air-conditioning system are properly sealed and insulated, especially with those which pass through the attic or other uncooled spaces. Effective caulking and weather stripping will help keep the cool air from escaping from your house.
During the summer months, be sure to clean or replace your air filters monthly to keep things running efficiently. Dirty or clogged filters block normal air flow and won’t allow the system to function properly. Some units have replaceable filters, while others you can just clean off by brushing off the lint and then rinsing in soapy water, so check to see which type of unit you have.
Keeping the areas surrounding your outdoor condenser unit free of dirt and debris will help keep the area open for air flow and avoid dirt getting into the coils to keep the unit.

Other Ways to Cool Your Home

According to the U.S. Census Bureau, nearly 90 percent of new single-family homes currently are built with air-conditioning systems, while just 30 years ago, fewer than half of new homes had this luxury. Whether your home has air-conditioning or not, consider these alternative ways to keep your home cooler in the summer:

Installing ceiling mounted fans can help circulate the cool air throughout your house.
Whole House fans are another option to think about depending on the climate where you reside. These devices lower the inside temperature of the home by pulling air through open windows and exhausting it through the attic and roof. Using these in place of air-conditioning units can reduce the amount of energy used and lower your bill significantly.
Putting awnings over windows or closing the blinds during the heat of the day will help to keep the inside of your home cooler.
To maximize cooling, the outdoor air-conditioning unit should be shaded from the sun. Trees, shrubs or awnings may be used to provide shade, however they should be kept about two feet away from the unit to allow for air to escape properly.

Energy Saving Tips

According to the U.S. Department of Energy, heating and cooling account for about 56 percent of the energy use in a typical U.S. home, making it the largest energy expense for most homes. Minor changes around the house can help cut energy costs:

Using a programmable thermostat to automatically adjust your air conditioning settings at night or when no one is home can save you about $150 every year in energy costs. If you don’t have a programmable thermostat, just manually change the temperature settings to a higher temperature before you leave the house.
Not only can landscaping help make your home and yard look its best, but it can also help you lower your summer energy bills. Planting trees around your home can help provide additional shade around your home and prevent your air-conditioning unit from having to work as hard to cool the home.
Don’t place lamps or televisions near your thermostat as these items give off heat and will cause the air-conditioner to run longer.
If you are in the market to buy a new air conditioning unit, consider purchasing an ENERGY-STAR which can save up to 20 percent on cooling costs.

Is your house good at keeping cool? Take this quick quiz, and see if your home makes the grade!

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Top Ways to Add Value to Your Home

Painting can be a quick and easy way to bring new life — and value — to a home.
Americans will spend nearly $233 billion on home remodeling this year, according to the National Association of Home Builders 2007 industry forecast. That represents a 1.9 percent increase from the record $228 billion spent in 2006, according to estimates from the U.S. Census Bureau.

But all home remodeling projects are not equal. Which projects are the best ones for those looking for a solid return on their investment (and higher profits come selling day)? Here are some top ways to add value to your home.

Remodel/Add a Home Office
Home offices are becoming less of a luxury and more of a necessity, with more people telecommuting. The number of Americans who work from home is in the millions, and that number has continued to grow every year. With many companies cutting costs and becoming more aware of their carbon footprints, telecommuting has become a viable solution for many in the working world. Making sure that your home has a state-of-the-art space for potential teleworkers is a surefire way to increase your home’s value.
Renovate or Add a Family Room.
With open floor plans becoming more in demand, a family room is an excellent way to make existing homes more like new construction. Remember, it’s a good idea to keep in mind what homes in your area are like. People like to purchase homes that blend with other homes around them. Chances are you’ll find many of your neighbors are investing in family rooms as well.
Replace the Roof.
The roof is one of the first impressions people have of a home. Make sure yours passes the test by replacing an old roof. You also change the character of your home by looking into architecturally styled roofing tiles.
Landscape Your Yard.
Along the same lines of thinking as the roof, landscaping can give a great — or not so great — first impression. Backyard landscaping can transform ordinary spaces into incredible entertaining areas by including elegant water features and lush plants. Consider your area’s climate. If you live in an area that receives temperate weather year-round, you’ll find that your new landscaped yard adds value to your home and increases your living space.
Replace Old Windows.
Thirty percent of a home’s energy is lost through its windows. Replacing old windows with energy-efficient versions signals to home buyers that you really care about the house and reflects on the quality of the house as a whole. Plus, who doesn’t like to save money on energy bills?
Remodel Your Basement.
Look at space you already have. Do you have unused space that serves as a black hole for all things without a home? Try remodeling your basement. Remodeled basements can make excellent game rooms or guest suites, adding value to your home without adding space.
Paint, Paint, Paint.
Enough said. But remember to hire a professional if you need help and keep the colors neutral if you’re looking to sell. Nothing looks worse than a poorly done paint job in bright fuchsia.
Remodel Your Kitchen.
Small changes can result in big value. Upgrading appliances, door handles, and painting tired walls can add new life to your kitchen, and add value to your home. The general rule when doing a remodel is not to overdo it. That is unless it’s a kitchen. Kitchens sell a home, and in this case, size does matter. But a kitchen remodel is a long term investment; you’ll see payback 10 years down the road. And know your limits when it comes to DIYers. Sometimes doing it yourself can save money, but always bring in a professional for the big jobs.
Remodel or Add a Bathroom.
A bathroom remodel can often mean simply making the most of your current space, by upgrading fixtures, flooring and lighting. Have a little more money in the budget? Adding a bathroom is a great way to add value to your home. Is your only bathroom upstairs and not convenient for dinner guests? Often the area under a set of stairs is the perfect place for a powder room.

For more information on adding value to your home, contact your local home builders association. To find out why now is a great time to buy, visit www.nahb.org/timetobuy. [return to top]

New Hotline Helps Prevent Home Foreclosure

A new hotline promises assistance for homeowners in financial trouble.

NeighborWorks® America, one of the nation’s largest housing and community development organizations, has announced a new public awareness campaign with the Ad Council aimed at preventing home foreclosure that urges homeowners in financial trouble to call 888-995-HOPE.

The Homeowner’s HOPE hotline, provided by the Homeownership Preservation Foundation, is the cornerstone of a foreclosure prevention effort involving many of the country’s largest mortgage market companies. The public awareness campaign strives to reduce the number of homes entering the foreclosure process, which is expected to exceed one million households in 2007.

Given that each foreclosure costs $30,000 or more, the total cost to the housing finance system of one million foreclosures could approach thirty billion dollars.

The Neighborhood Impact from Foreclosure

Research shows that homes that are not directly foreclosed upon can also be affected by foreclosure. Research showed that homes that are close to those that were foreclosed upon lose nearly one percent of their value for each foreclosed property within an eighth of a mile. For hard-hit neighborhoods around the country where dozens of homes within blocks of each other have been foreclosed upon, neighboring homeowners can expect their home values to drop by 10 percent or more.

The public awareness campaign by NeighborWorks America and the Ad Council is aimed at preventing this devastating outcome.

Earlier in the year, the Mortgage Bankers Association released residential mortgage foreclosure statistics that show the problem of foreclosure is increasing. Families are under stress from a variety of complicated sources — high mortgage costs from adjustable rate and subprime mortgages, weak local economies, personal factors such as illness, or divorce and more. NeighborWorks America and the Ad Council are hoping that homeowners that call the hotline can begin the conversation to work out the problem and avoid foreclosure.

"We're currently hearing from more than 500 callers each day," said the Homeownership Preservation Foundation President and Executive Director Colleen Hernandez. "Homeowners are facing foreclosure at record rates. This issue reaches into every social and economic demographic out there and homeowners facing delinquency need to remember that they're not alone. Even if you're currently not having problems paying your mortgage, chances are you know a friend, family member, co-worker or acquaintance that may be. We want to get the message out there — call 888-995-HOPE for help."

Research conducted by Freddie Mac shows that half of families who enter into foreclosure never call their lender for help. “That’s the wrong thing to do," Wade said. "When a home is foreclosed, everyone loses — the family, the community, and the lender.”

The television and radio public service announcements began airing in early July. Print and Internet-targeted spots are scheduled to folllow. The public service announcements, and more information about the campaign, are available on the campaign’s web site, www.foreclosurehelpandhope.org.

NeighborWorks Foreclosure Prevention Efforts to Date

A key element of the NeighborWorks America fight against foreclosure is its signature program, the NeighborWorks Center for Foreclosure Solutions (CFS), created to preserve homeownership in the face of rising foreclosure rates. In conjunction with national nonprofit, mortgage and insurance partners, the CFS builds capacity among foreclosure counselors around the nation, conducts public outreach campaigns to reach financially distressed homeowners, and researches local and national trends to develop strategic solutions. In cities and states with high rates of foreclosure, the CFS works with local leaders to create sustainable foreclosure intervention programs.

CFS already has launched statewide foreclosure prevention initiatives in Ohio, Georgia and Delaware and local initiatives in Baltimore and St. Louis. The CFS plans to start dozens more local and state initiatives and to leverage the influence of the Ad Council campaign to encourage more families to call their lender or local NeighborWorks organization for help avoiding foreclosure. The current campaigns have helped increase the number of callers to the 888-995-HOPE hotline from approximately 700 per month in July 2006 to nearly 15,000 per month in June 2007.

More than 190 local nonprofits and municipalities have joined the national ad campaign to promote foreclosure counseling in their communities.

For more information mortgages and foreclosures, contact your lender, mortgage banker or home builders association.

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When the Family Is Away, Make Sure the Burglars Don’t Play

Summertime means family vacations – and a rise in home burglary.
It’s a fact that almost all types of personal and household crime are highest in the warm months when people spend more time away from home on vacations or are involved in outdoor activities. But you can help avoid becoming part of this statistic by taking action to protect your home, property, and family while you’re relaxing and having fun in the sun!

The National Crime Prevention Council states that although crime is still a very serious concern, our homes and communities are safer than they’ve been in decades, and this is quite likely due, at least in part, to prevention and community policing.

A few proactive measures and common sense can prevent your vacation from being wrecked by a break-in. Follow these tips and enjoy a safer and happier summer season.

First and foremost, lock up! Whether it’s a short trip to the grocery store or a longer haul to your favorite vacation spot, make sure your doors and windows are securely locked.

“Even small measures like getting good quality door locks or driving a long nail into a window frame at the midpoint can help give a home an added level of security,” said Deputy Pam Suter of the Arlington County, Va., Sherriff’s Office.

Remember that nothing is more effective at deterring a burglar than the impression that the home is occupied. Install timers on your lights to make it look like someone is home. If you are planning to be away for a lengthy period of time, entertain the idea of a house sitter.

Store valuables in a secure place. A home safe can be a great option for storing various valuables including jewelry and important home and family-related documents.
Garage doors are a favorite point of entry for burglars. Keep your garage door closed at all times, and lock the door from your garage into your home. Be certain that tools, ladders and other objects that could be used to break into your home are securely locked up inside the garage or house.

Be sure that your trees and shrubs don’t cover windows and doors. Hidden entrances can make it easier for burglars to get into your home unnoticed by neighbors and bystanders.

Leave spare keys only with trusted family members or neighbors you are close to. Do not hide them outside. Burglars are smart enough to look around and know the common places people hide keys.
You may also want to consider a home security system. Check online or look in your phone book to find companies specializing in home security.
Most experts agree that your neighbors are one of your best defenses. Get to know them and chances are they will be more likely to watch for suspicious activity around your home while you’re away. “It’s important to notify neighbors that you trust about your plans to be out of town,” Suter said.

Break-ins can be easily avoided by taking the proper precautions. So be prepared, make wise decisions and relax.

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NAHB to Launch National Green Building Program

Looking to buy a new green-built home or do some green remodeling? The National Association of Home Builders (NAHB) is about to launch an important new program to make that task easier.

NAHB is creating a national green building program to provide a template for voluntary, market-driven green building all over the country. A brand-new Web site with extensive consumer information and resources and a national directory of green builders are also being developed.

The new program includes certification based on the National Green Building Standard, a model for residential construction and renovation written by builders, architects, environmentalists and product experts that will be released in early 2008.

This standard is based on NAHB’s Model Green Home Building Guidelines, which are the foundation of more than 20 state and local residential green building programs.

“With a national program, home buyers can be assured that their home is truly green, whether they live in Seattle or Savannah, in a condo or a ranch house, and whether they’re renovating or buying new,” said NAHB President Brian Catalde, a Southern California home builder.

“It’s also the next logical step for us as leaders in the green building movement. Our members have built nearly 100,000 green homes in voluntary programs launched by home building associations all over the country. Each of these homes is unique, representing local geography, climate and consumer preference. With an affordable national program, we will provide home buyers with green homes even where there is no local program in place,” Catalde said.

Like the Model Green Home Building Guidelines and the Standard, the National Green Building Program takes into account a home’s lot development, resources use, energy and water efficiency, indoor environmental quality, durability and ease of maintenance, and homeowner education efforts when determining its “greenness.”

The program will be housed at the NAHB Research Center, the country’s premier institute of home building product certification and research. It will include an interactive, web-based certification system as well as other tools and resources for home buyers, builders and certifiers, and a national registry of green builders and green homes. Many of these builders are part of local green building programs which will include the national name in their marketing pieces.

“When it comes to residential building and remodeling, NAHB members are leading the way to creating a new, green-built nation,” Catalde said. “With the expertise and resources of the NAHB Research Center, our new national program will help accelerate that process.”
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How Long Will It Last? From Roof to Paint, The Life Expectancy of Your Home’s Components

From siding to shingles, a home consists of literally thousands of components.

Just like the human body, your home is made of parts, all working in unison, many unseen and ignored during the course of your daily life. From the roof to the foundation, and from the front door to the back, a home consists of literally thousands of components.

Ideally, these components might all have an unlimited life expectancy. But given the realities of day-to-day use, how long can a home owner reasonably expect a home component such as a window or roof to last?

A new study conducted by the National Association of Home Builders (NAHB) and sponsored by Bank of America Home Equity provides insight into the life expectancies of a number of products in the home.

The study intentionally overlooked consumer preferences, acknowledging that if they were considered, kitchen counters would be replaced long before the end of their useful life, and rooms may be repainted only once in 50 years.

Other factors that can have a significant effect on life expectancy include maintenance, proper installation, the level of use and the quality of the materials. And some components, while remaining functional, become obsolete due to changing technology or improvements.

Insulation
According to the study, all types of insulation can be expected to last a lifetime if they are properly installed and are not punctured, cut, burned or exposed to ultraviolet rays and are kept dry. Proper installation not only extends the lifetime of your insulation, it also ensures that it will perform properly, resulting in reduced energy use and expenses, as well as increased home comfort.

Windows
Windows, because they can be exposed to extreme weather conditions, have a much shorter life expectancy. The study, which polled experts in the various fields, found that aluminum windows can reasonably be expected to last 15 to 20 years and wooden windows can last upwards of 30 years. An important element of maintaining your windows is the window glazing – the putty that secures the glass to the sash. Over time, this glazing can crack, resulting in drafty and loose panes. Available at any hardware store, glazing can be replaced by simply chipping or scrapping off the old putty, cleaning the window thoroughly and installing new glazing with a putty knife or caulking gun. Some types of glazing require a coat of latex paint for weatherproofing.

Roofs
Like windows, the life expectancy of a roof depends on local weather conditions as well as appropriate maintenance and quality of the materials. Slate, copper and clay/concrete roofs can be expected to last more than 50 years. Roofs made of asphalt shingles should last for about 20 years; fiber cement shingles should last about 25 years; and wood shakes for about 30 years. In regards to roof maintenance, it’s important to be proactive to prevent emergency and expensive repairs. Look for damaged or loose shingles; gaps in the flashing where the roofing and siding meet vents and flues; and damaged mortar around the chimney (especially at the joints, caps and washes). If you see any signs of damage, call a professional to repair it.

Paint
Although some avid decorators may repaint every six months, homes usually need to be painted every five to 10 years depending on the content of the paint (its glossiness), its exposure to moisture and traffic. Quality paints are expected to last upwards of 20 years. Exterior paint conditions should be regularly monitored in order to catch problems early on. Assessing paint for dirt, mold, cracking, peeling, fading and rusting—and repairing immediately, usually through simple cleaning methods such as scrubbing or power washing—can end up saving homeowners much more costly repainting jobs in the long term.

Remember, these numbers are averages, with usage, weather, maintenance and a number of other factors influencing life expectancy. Chances are, changing trends will dictate a shorter life span, as homeowners update and remodel their homes.

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Keep Safe With Smoke Alarms

Visit www.smokealarmswork.org to find out more on how to prevent the tragedy of a home fire.

How can you keep your family safe from the tragedy of a home fire? Use common sense when lighting candles or using tobacco products. Make sure space heaters are in good working order and not near any flammable objects. Have a fire escape plan and discuss it regularly with your household. And finally, make sure you have correctly installed and maintained smoke alarms.

Smoke alarm systems are an early-warning system to protect your family. They should be installed on every level of your home, including the basement and in all sleeping areas in accordance with manufacturers' instructions and applicable building codes and ordinances.

You can buy smoke alarms in hardware or home supply stores, or even over the internet. If a smoking cooking pot or a fireplace causes your smoke alarms to go off accidentally, wave the smoke away to get it to stop sounding — but never disable your smoke alarm.

Check your smoke alarm batteries once a month to see if they're still working. Replace the batteries once a year, and replace your smoke alarms once every eight to 10 years. You should also vacuum your smoke alarms periodically to keep them dirt- and dust-free. More information is available at the Environmental Protection Agency Web site, and the Consumer Product Safety Commission has many helpful ideas for staying safe.

Smoke alarm technology is always changing and improving, with new versions featuring wireless technology and alternate signal noises that are easier for children and for seniors to hear.

While fire prevention experts all agree that every home should have a working smoke alarm system, not every home does. A study from the University of Iowa found that older homes with multiple levels, like basements and second stories, or that were cluttered or poorly cleaned were significantly less likely to be fully protected with appropriate smoke alarms. The study shows that consumers need more information about the installation and maintenance of a smoke alarm system.

A study published in the Journal of the American Medical Association found that public health strategies to reduce residential fire-related injuries and deaths that include smoke alarm installation, monthly testing of smoke alarms, reduction of residential fire hazards, design and practice of fire escape plans, fire safety education, and implementation of smoke alarm ordinances achieve continued declines in residential fire-related deaths.

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It Pays to Go Green When Remodeling

By doing something as small as reducing water usage in a bathroom, homeowners can save hundreds of dollars a year.

It pays to go green when remodeling, according to research by the National Association of Home Builders (NAHB) and the NAHB Remodelers. “Our customers can make decisions that soothe their conscience while increasing their savings,” said NAHB Remodelers chair Mike Nagel, a remodeler in Roselle, Ill.

Remodeling accounts for more than 40 percent of the home construction. “Americans spent more than $230 billion last year in home remodeling, with energy-efficient and sustainable products representing an increasing share of the market,” Nagel said.

Statistics from NAHB illustrate that most remodelers already use energy-efficient products and green materials. Eighty-five percent of remodelers surveyed used low-emissivity windows, which keep energy from leaking from the house. Sixty-eight percent use insulated exterior doors and 56 percent installed high-efficiency heating and air conditioning systems. Further, more than 75 percent avoid using wood from old-growth forests and 65 percent use recycled or recyclable materials in their construction.

Over the course of its transformation in recent years from a Discovery Channel phenomenon to a common concern for home owners everywhere, green remodeling has led to better green technology. “Now, more than ever, it is easy being green,” Nagel said.

Greening up your home to save on energy bills is easy to do if you know where to start. NAHB and Bank of America Equity’s Study of Life Expectancy of Home Components (SLEHC) and ENERGY STAR®, a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy show that water is one of the biggest sources of waste. It is also a place where home owners can make a big energy difference. By doing something as small as reducing how much water a bathroom uses, home owners can save hundreds of dollars a year.

SLEHC statistics show that the average lifespan of a shower or bath enclosure is 50 years, and an ENERGY STAR-rated low-flow showerhead can save a homeowner up to $145 per year over the showerhead’s lifetime. With that in place, according to ENERGY STAR, “A 10-minute shower can use less water than a full bath.”

Toilets are another area where water conservation is a worry. The average bathroom toilet lasts about twenty years, according to the SLEHC, but a new energy-efficient toilet would make it worth remodeling earlier than that. High-efficiency, dual-flush toilets save thousands of gallons of water compared to their conventional counterparts, and pay for themselves in 10 years.

The Department of Energy has also found that lighting is a big contributor to home energy use. Fortunately, it is also a place where homeowners can easily take action. By replacing five of the most-used light bulbs in a home with ENERGY STAR-rated lighting, home owners can save up to $60 a year on their energy bills and also equip their homes with fixtures that give off less heat.

The government is another source for consumers wanting to save while going green. Home owners can become eligible for federal tax credits by putting in a solar water heater, which pays back its $3,000-$5,000 cost in 10 years. State tax credits are also available. Check out the Database of State Incentives for Renewables and Efficiency to learn more.

With all of these options, home owners have every reason to dive into the world of green remodeling.

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Photo Gallery: Outdoor Spaces

The summer months are finally here and the great outdoor beckons. Here's a look at the best of outdoor spaces — an ingenious place that allows you to enjoy the best of the indoors in the beauty of the outdoors. In our next issue — mark your calendars — in September, we'll be looking at the "hot" room in the house — the kitchen!

To submit your home's kitchen space for consideration, e-mail nclark@nahb.com and include the subject line "Photo Gallery: Kitchens."

This outdoor kitchen and entertaining space, as seen in the 2006 New American Home in Orlando, Fla., was built by Hannigan Homes. Inc. The space is designed to flow into the interior when walls of doors slide into hidden pockets, and features retractable screens.

photo by James F. Wilson

At the 2007 Renewed American Home in overlooking Lake Eola in downtown Orlando, remodelers PSG Construction, Inc. added this outdoor area next to garage/mother-in-law suite to increase living space.

photo by James F. Wilson

In Monte Hewett Homes’ new development in metro Atlanta, West Village, patios feature fireplaces, a growing trend in outdoor living spaces.

For those looking for creative ideas, the following images from the Backyard Idea Book by Lee Ann White (Taunton Press, 2004) show just how different and unique outdoor living can be. Here is a homeowner who has taken advantage of their water views with a lush garden wonderland.

photo by Steve Silk, Taunton Press

Another space shows a how dining outdoors can be an elegant experience sans picnic box and a blanket.

photo by Anne Gummerson

Even small spaces can become retreats when designed appropriately. Plants and flowers add to this courtyard's serenity.

photo by Lee Ann White

Personal touches such as sculptures and a porch swing transforms this patio into an unique and artful gathering area.

photo by Dency Kane

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In My Opinion: Fair Housing for Housing Affordability

In the midst of the racial upheaval of the late 1960s and in the immediate wake of Dr. Martin Luther King, Jr.’s assassination, Congress enacted the Civil Rights Act in April 1968. Title VIII of that law is known as the Fair Housing Act (FHA). The FHA declares the “policy of the United States to provide, within constitutional limitations, for fair housing throughout the [Nation].”

The FHA’s central provision makes it illegal for any person to discriminate in the sale, rental, and financing of dwellings based on race, color, national origin, disability, or other protected groups of citizens set forth in the statute. In the FHA’s early years, a unanimous panel of the United States Supreme Court declared that the Act’s language is “broad and sweeping,” its text must be afforded a “generous construction,” and it embodies a “policy that Congress considered to be of the highest priority.”

Forty years ago, the most pressing problems to address in the housing industry were racial steering and blockbusting by real estate brokers, and other forms of overt and intentional discrimination. However, the legislative history of Title VIII indicates that its framers meant to put an end to all forms of housing discrimination. Some of the discriminatory tactics used today are more subtle, but the FHA nonetheless prohibits them even if they are not motivated by racial animus or a purposeful intent to discriminate. Indeed, every federal appellate court that has considered the issue has held that a violation of the FHA does not require proof of intentional discrimination to deprive housing opportunities.

In the housing development context, the FHA certainly makes it illegal for a local city council or zoning board to block a residential project where the motivation is to bar African Americans, Hispanics, and other minorities from living in a certain neighborhood. But the FHA is a powerful law, and prohibits more than intentional forms of housing discrimination. A variety of land use and zoning regulations employed under the guise of “smart growth” can effectively discriminate against minorities, and thereby violate the FHA. For instance, a “Not-In-My-Back-Yard” attitude pervades many communities throughout the Nation, as local officials react to citizen sentiment and deny approvals for higher density residential projects that moderate- and lower-income families could afford.

Local governments frequently adopt ordinances establishing large minimum lot sizes, expansive setbacks and side yards, open space set asides, tree planting requirements, and aesthetic controls like brick or masonry construction, to preserve a certain affluent quality and appearance of a community and protect property values. These measures, however, may simultaneously preclude housing opportunities for the economically disadvantaged who can only afford to rent apartments or own multi-family dwellings like townhouses or condominium units.

All lower income persons feel the impact of land use controls that increase the sticker price of housing. However, if the effect of these development regulations has a greater impact on minorities in depriving them housing opportunities, then local governments that enact such regulations may have violated the FHA — because the effect of land use regulations has a disparate impact on minorities and other persons protected by the statute. Land use policies that deprive minority families access to quality affordable housing are certainly not smart growth.

To be sure, the FHA does not prohibit economic discrimination; moderate and lower-income individuals are not among the statute’s named, protected groups. Nor does the FHA protect certain types of affordable housing projects that are government-subsidized with grants, vouchers, tax credits, loan guarantees, bonds or some other method of financing. However, when governments adopt land use controls that effectively preclude housing opportunities for the poor or specific projects geared toward low-income residents, the FHA can be a powerful tool to ensure that homes are available for all citizens – regardless of race, wealth, or ethnicity.

Duane Desiderio is Staff Vice President of Legal Affairs at the National Association of Home Builders. You can reach him at ddesiderio@nahb.com.

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