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There are also many other benefits to the plan, including reduced risk of mortgage failure, increasing home values, more disposable income for homeowners, jobs to those who will pay federal taxes, a new market for material and product manufacturers, and dramatically reduced home energy consumption and greenhouse gas emissions.

The 14x Stimulus plan is a state-and-local version of Architecture 2030's "Two-Year, Nine-Million-Jobs Investment Plan." The national plan, which also ties a mortgage buy-down to energy reduction targets, calls for strategically investing almost $192.5 billion in the private building sector to create jobs and generate private spending.

The Urgency

Simply put, if we do not stimulate building construction — specifically, renovation and home building — we will not revive the U.S. economy in any substantive and lasting way.

The private building sector represents 93% of total U.S. building stock, while the public building sector represents only 7%. The economic health of every U.S. industry is tied to the private building sector, especially housing. This includes everything from steel, insulation, caulking, mechanical and electrical equipment, solar systems, glass, wood, metals, tile, fabrics, and paint to architecture, planning, design, engineering, banking, development manufacturing, construction, wholesale, retail, and distribution.

The Plan: How It Works

Under the 14x Stimulus plan, home energy use reductions would be referenced to the Home Energy Rating System (HERS) or an equivalent system. (For more information on HERS, please see the sidebar. For more about rating systems, see "Meeting the 2030 Challenge Through Building Codes" at Architecture 2030.)

For existing homes, mortgage interest rates would be lowered by one percent if, with a minimum homeowner investment in efficiency upgrades and/or renewable energy systems, the home is renovated to meet a minimum HERS 70 rating, which is equivalent to being 30% more efficient than what is required by the latest energy codes, namely International Energy Conservation Code (IECC) 2006.

For new homes, interest rates would be lowered by one-half percent for achieving a HERS 70 rating, and one percent for achieving a HERS 50 rating (50 more efficient than IECC 2006).

Assuming the current average U.S. 30-year fixed mortgage interest rate is five percent, the mortgage buy-down program would work as follows:

Mortgage Interest Rate		Minimum Energy Reduction Target
Existing Home	New Home
4.0%	4.5%	HERS 70 (30% below IECC 2006)
	4.0%	HERS 50 (50% below IECC 2006)

To qualify for the lower interest rate, new homes need only meet or exceed the minimum HERS 70 or HERS 50 rating. For existing homes, the homeowner must meet both the minimum HERS 70 rating and invest a minimum amount of money in energy efficiency and/or renewable energy systems. The minimum amount required to be invested is double the cost of the buy-down and is dependent on the amount of the mortgage.

Mortgage Amount	Cost to State or Local Government of Buy-Down (1.0%)*	Minimum Homeowner Investment
$150,000	$6,000	$12,000
$200,000	$8,000	$16,000
$250,000	$10,000	$20,000
$300,000	$12,000	$24,000
$350,000	$14,000	$28,000
$400,000	$16,000	$32,000
* Assumes the cost of a 1% mortgage rate buy-down is 4 points (or 4% of the mortgage amount).

The Return On Investment: Everyone Wins

The seemingly odd pairing of interest rates and energy reduction targets turns out to be economically powerful, both creating an immediate demand for construction jobs and generating significant private spending.

For example, if a homeowner wanted to refinance a $200,000, 6%, 30-year mortgage at a 4% interest rate, the home would need to be renovated to meet a HERS 70 rating, immediately creating jobs by putting construction teams back to work. To qualify for the program, the homeowner must invest a minimum of $16,000 in efficiency measures, thereby generating much-needed private spending.

However, even with the cost of the efficiency upgrades added into the new mortgage, at the lower 4% interest rate, the homeowner would pay a minimum of $168 less each month. Add to that an additional savings on energy bills of approximately $60 and the homeowner would save $228 or more every month.

In addition, homeowners can take advantage of the $1,500 federal energy efficiency improvement tax credit and 30% solar power tax credits, as well as any local incentives that apply.   >>>

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SUBSCRIPTION SAMPLE Features such as a 3.1-kilowatt rooftop photovoltaic array and an LED lighting system help the RainShine House to be about 57% more energy efficient than specified by International Energy Conservation Code (IECC). Photo: Courtesy Robert M. Cain, Architect Extra Large Image The HERS index assigns a score of 100 to a reference home built to IECC 2006 standards, with lower scores indicating better energy efficiency. Architecture 2030 proposes building incrementally more energy-efficient houses. Image: RESNET/ Architecture 2030 SUBSCRIPTION SAMPLE U.S. energy consumption chart. Image: Architecture 2030 (data source: Energy Information Administration (EIA), U.S. Dept. of Energy) U.S. electricity consumption chart. Image: Architecture 2030 (data source: Energy Information Administration (EIA), U.S. Dept. of Energy) Graph comparing new-house insulation levels by decade built. Image: EIA Graphs comparing heating-degree and cooling-degree days in 2007 against a 30-year normal. Image: EIA Extra Large Image Diagram illustrating common air leaks in existing homes. Image: U.S. Environmental Protection Agency Diagram illustrating common duct problems in existing homes. Image: U.S. Department of Energy Extra Large Image   Click on thumbnail images to view full-size pictures.