Integrating Construction and Financing


In the traditional home procurement process “affordability” is a simple function of reducing what a home costs to build, with little-to-no consideration of what value and savings the integration of “beyond code” or “green” construction provides to the homeowner. Building to beyond code standards certainly increases the cost of home construction, but simultaneously provides month after month and year after year savings through a reduction in energy bills, insurance costs, and the like. There is currently no provision for how these post-occupancy monthly savings might be leveraged to reconsider the financing and monthly mortgage carry of the homeowner, and thus such upgrades are most often perceived of as unaffordable. 

Opportunity & Response

Some not-for-profit housing providers are set up to consider the total cost of homeownership. For example, since Habitat for Humanity is in control of the project financing (both construction financing and the mortgage for the homeowner), they are able to work in an integrated construction and finance model, considering building performance in the total cost of homeownership. Rural Studio provides up front predictive energy modeling, testing and verification during construction, and ongoing post-occupancy monitoring and homeowner education to ensure the high-performance capabilities of the homes are both met and maintained. Where housing partners are in control of both construction and financing, the information developed through this process increasingly allows our housing providers to integrate the high-performance savings into their overall housing finance and delivery strategy.