Energy Efficient Mortgages Pilot Scheme Roadmap for Lending Institutions
This page aims to provide a roadmap to assist the planned Energy Efficient Mortgages Initiative (bringing together EeMAP & EeDaPP) Pilot Scheme. In doing so, the following sections introduces the Pilot Scheme Implementation Guidelines, which framework will underpin the Pilot Scheme, and describes the scope of the Pilot Scheme as well as its key objectives and the steps which lending institutions or other actors who are interested in participating in the Pilot Scheme should undertake.
Lending institutions interested in participating in the Pilot Scheme are kindly invited to signal this by email to the Energy Efficient Mortgages Initiative Coordinator, Luca Bertalot Secretary General of the EMF-ECBC, on firstname.lastname@example.org
Background and scope
The Energy Efficient Mortgages Initiative aims to design an optimal cost-effective value chain and ultimately to analyse the feasibility of an “energy efficient mortgage”, according to which building owners would be incentivised to improve the energy efficiency of their buildings or acquire an already energy efficient property by way of favourable financing conditions linked to the mortgage. The ability of lending institutions to offer incentives linked to the mortgage (e.g. reduced interest rates and/or increased loan amount) reflects the reduced credit risk of these loans.
In preparing the Pilot Scheme, the EeMAP Consortium has consulted widely across the finance, building performance and valuation sectors to draft a robust set of guidelines which are intended to support lending institutions whilst testing the energy efficient mortgage framework internally. The consultation on these guidelines has been underpinned by a series of national roundtables aimed at exchanging views and fine-tuning the guidelines with all relevant stakeholders.
To recall, the guidelines consist of three elements which reflect the three pillars of the energy efficient mortgage framework:
- Implementation Guidelines for Lending Institutions
- Building Performance Assessment Criteria
- Valuation and Energy Efficiency Checklist
The framework and therefore guidelines are intended to be valid for new and existing residential [single family & multi-family] and commercial properties.
Pilot Scheme – Objectives
Pilot Scheme – Energy Efficiency Mortgage ‘Sandbox’
The Pilot Scheme will be underpinned by a governance structure to assess, support and advise, as relevant, on the interpretation, analysis and potential implementation of the energy efficient mortgage framework:
- EeMAP Institutional Advisory Council
The main role of this Group will be to coordinate institutional support to ensure a ‘sandbox’ or ‘laboratory’ for lending institutions participating in the pilot scheme. The Institutional Support Group will act in an advisory role to participating lending institutions, providing advice and recommendations on already existing support schemes in order to maximise the impact of implementing energy efficient mortgages into existing products lines. In turn, the Institutional Support Group will support the deployment of the Pilot Scheme in the market and suggest improvements/adjustments where necessary.
The Institutional Support Group will be composed of representatives from the European Commission, European Investment Bank, European Investment Fund, European Bank for Reconstruction and Development; World Bank UNEP FI and International Finance Corporation, supported by the EeMAP Consortium Partners.
- EeMAP Task Force within Lending Institutions
In order to facilitate effective and coordinated implementation process between Pilot Scheme participants, the EeMAP Consortium and the Institutional Support Group, each lending institution participating in the Pilot Scheme is advised to set up an EeMAP Task Force.
The EeMAP Task Force should assess the feasibility of implementing the energy efficient mortgage framework within existing product lines and processes, and later oversee and manage its implementation. In order to facilitate and ensure a coordinated approach across departments, the Task Force should be composed of representatives from the funding, risk management and retail departments, for example.
- EeMAP National Coordinator
In order to facilitate and centralise coordination at national level, national banking or mortgage associations should play a role as a hub/centre of expertise for questions from internal contact groups within lending institutions on all issues related to the framework. In this way, questions can be collected centrally and escalated to the EeMAP Consortium, and the subsequent answers shared with the internal contact group of lending institutions the benefit of all participating lending institutions.
- Review Process
The guidelines will be reviewed and updated at appropriate intervals during the pilot scheme based on feedback received, ensuring that the energy efficient mortgage framework is as robust and relevant as possible, and reflects the state of the market.
Pilot Scheme – In practice: 6 Steps
In order to participate in the Pilot Scheme, lending institutions are encouraged to follow these 6 steps:
- Step 1
Set up an EeMAP Task Force with representation from across departments and share contact details with the EeMAP Consortium Coordinator, the EMF-ECBC. The EMF Task Force should also liaise with the EeMAP Institutional Support Group.
- Step 2
Assess how the energy efficiency mortgage framework can be implemented into existing product lines and processes using the Pilot Scheme Framework, with a view to originating the product in due course, and report progress back to the EeMAP Consortium.
- Step 3
Provide feedback and advice on the Pilot Scheme Framework in order to facilitate improvement and/or amendment, where necessary, to ensure an appropriate and product and framework.
- Step 4
Identify which existing mortgages already meet the requirements put forward in the Pilot Scheme Framework and tag those as energy efficient mortgages.
- Step 5
Record data relating to the new and existing energy efficient mortgages. This data should be shared with the EeMAP Consortium Coordinator, the EMF-ECBC for analysis purposes.
- Step 6
Signal compliance with the EeMAP Framework, on a self-certification basis and as relevant, to the EeMAP Consortium in the event of the offering of an energy efficient mortgage product to the market.
EeMAP Initiative Coordinator