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Issues- Affordability & FinanceTitle Arrow

Affordability for Homeowners, Housing Developers, and Housing Institutions

Homeowners want to minimize the price of their home (as well as maintenance, insurance, and utility costs) and see its value increase over time. Housing developers want to reduce the construction costs of housing units so they can make homes available to their clients at lower prices. Housing institutions want to offer mortgages, insurance rates, and utility rates that take each house's physical attributes into account, thereby minimizing their financial risk. Some technologies decrease the costs of building a home while maintaining or improving its quality. It's easy for housing lenders to base a decrease in mortgage interest rates on such innovative materials and processes. For technologies that add to construction costs but decrease long-term costs, calculating the effect on loan, insurance, and utility rates is more difficult.

PATH is working on these issues in two ways. First, PATH ensures that homeowners and the general public are aware of major changes in homebuilding technology. Homeowners and developers can consider the long-term costs of their homes and ask builders to use improved technologies. Second, PATH promotes awareness of the improvements lenders, insurers, and utilities have made to their services, as demonstrated by the increasing availability of Energy Efficient Mortgages (EEMs). The more that owners and developers take long-term costs into account, the more new and innovative financing packages will become available.

Content updated on 9/1/2005

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