Week of 3/6/05

Dear EarthTalk: What are "energy efficient mortgages" and how do I qualify for one?

—Matt Hoffman, Seattle, WA

A movement is afoot among real estate lenders to offer special mortgages and other incentives designed to reward energy efficiency and green-friendly building and restoration. Borrowers planning to purchase new energy efficient homes, as well as those looking to do ecologically motivated renovations on older homes, can take advantage of such programs to increase their mortgage amounts while offsetting construction costs.

Fannie Mae, the Congressionally chartered company that works with lenders to back mortgages for low and moderate income Americans, is the prime mover of "green" mortgages through its Energy Efficient Mortgage (EEM) program. To qualify for the program, homeowners must either buy a new energy efficient home, or commit to upgrades of an existing home as recommended by an inspector certified through the Home Energy Rating System (HERS).

Such HERS inspections can run as much as $400, but the projected savings from energy efficiency are considered part of the borrower’s income and can help homebuyers qualify for larger mortgages. By increasing borrowing power, the EEM allows homeowners to fold the costs of energy efficiency into the total mortgage amount. Factors such as window efficiency, heating and cooling system efficiency, wall-to-window ratios, insulation levels and local climate—even the solar orientation of the home—determine a home’s HERS rating.

In a home that needs energy improvements, the HERS report will suggest specific improvements and estimate both the cost of the improvements and the expected energy savings. The cost of the energy improvements can be included in the homeowner’s mortgage, but is limited to 15 percent of the home’s value.

A borrower opting for new construction can qualify for an EEM if the home in question is to be built according to guidelines set by the Energy Star Builder Option Program, a project of the Environmental Protection Agency to encourage energy efficient building and design. Once construction on the new home is complete, a HERS inspection is conducted to determine the home’s energy efficiency, which will in turn dictate the specific terms of the EEM.

Eligible borrowers can obtain an EEM backed by Fannie Mae with as little as a three percent down payment. Detailed requirements for EEM qualification are available on the Fannie Mae website, which also posts a list of participating lending institutions from coast-to-coast.

CONTACT: Fannie Mae, www.efanniemae.com.

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Dear EarthTalk: What are the environmental impacts of our voracious appetite for coffee?

—Augie Dent, Capitola, CA

According to the Specialty Coffee Association, Americans alone consume some 300 million cups of coffee every day. Globally, coffee is second only to oil in terms of dollars traded, and it has a tremendous social and ecological footprint, particularly in regions of the world that also host some of the planet’s greatest, and most threatened, biodiversity.

Prior to the 1960s, most coffee was grown under the shade canopies of other plants in conditions not unlike natural tropical forests. These traditional coffee plantations harbored a wide range of plant diversity, and therefore provided valuable habitat for large numbers of migratory birds and other wildlife. The abundant flora and fauna also helped keep pests in check while providing a wide range of natural nutrients for the soil.

But over the last four decades, the growing popularity of coffee began to dictate the need for greater production, and coffee growers started clearing their land in order to grow higher yield coffee that thrives in direct sunlight. While financially productive, this sun-grown coffee takes a heavy toll on the environment, on wildlife, and on workers" health by eliminating the surrounding biodiversity and requiring heavy use of toxic fertilizers, pesticides and insecticides.

Among others, the Starbucks chain of coffee shops has been a recent innovator in trying to turn the situation around. In 1998 the company formed a partnership with Conservation International, a leading environmental non-profit, to encourage sustainable, shade-grown coffee production while also ensuring that small farmers and agricultural co-ops earn a living wage for their labors, a concept known as "fair trade." Starbucks" Organic Shade Grown Mexico, Decaf Shade Grown Mexico, and Conservation Colombia coffees are all grown in an ecologically sound manner that protects the surrounding natural environment and respects the economic needs of farmers.

Shade-grown brands are also becoming more widely available to those more inclined to brew their coffee at home. The Smithsonian’s National Zoo website features a handy listing of "bird-friendly" coffee retailers (that is, bean sellers committed to shade-grown coffee only), searchable by zip code. The organization Rainforest Alliance, which also works to get the word out about coffee’s big footprint, certifies several brands, including Oriole Blend and Columbia Mesos de los Santos. And the website Coffee Review lists Green Mountain, Kaldi"s, Thanksgiving Coffee, New Harvest, Kaffe, Café Campesino and Coffee Tea Etc. as coffees that top the list in terms of pairing excellent taste with environmentally-responsible growing practices. Many of these brands are available at organic food specialty stores and at natural foods supermarkets like Whole Foods and Wild Oats.

CONTACTS: Starbucks, www.starbucks.com; Conservation International, www.conservation.org; Coffee Review, www.coffeereview.com; Smithsonian National Zoo "Bird-Friendly" Coffee Finder, www.nationalzoo.si.edu/ConservationandScience/MigratoryBirds/Coffee/; Rainforest Alliance, www.rainforest-alliance.org.