As California's home building landscape grows more competitive, Chase Home Finance, a mortgage subsidiary of JPMorgan Chase & Co., and No-Burn, a fire and mold prevention materials company, have teamed up to help California builders pack more value into their homes. When a builder includes No-Burn products in a new home's construction, Chase Home Finance will underwrite the mortgage, offering incentives such as a loan-rate discount or no closing costs to home buyers.

Lillian McBee, a loan officer for Chase Home Finance, says that since the partnership was struck, she's been fielding loads of questions from interested builders.

“From the time we got the word out with builders primarily in Southern California, there has been activity,” she says, adding that if the alliance is successful in California, the partnership could go nationwide.

Ken Rusk, vice president of No-Burn, says that Centex, Pulte, KB Home, Barratt American, and MPK are evaluating whether to approve No Burn as a vendor.

MOLDY FLOOR: New financial incentives available to help homeowners cut mold growth and damage. No-Burn's key products are a wood guard, a clear liquid applied to raw wood during framing, and a drywall product that replaces dry wall primer. Both choke out flames and mold growth, and include certified installation and a 10-year warranty.

The beauty of the deal is that builders can use the mortgage incentive to support selling No-Burn products as an upgrade, which generates an additional revenue stream. A full treatment—wood guard and dry-wall product—costs roughly an extra $2.50 per square foot, less the cost of the drywall primer normally used. Rusk says the products allow builders to add a 15 to 20 percent markup.

But Rusk says that it's been difficult getting builders to realize that the product can be an easy sell. Because it promotes preventative safety in the home and protects their greatest asset, homeowners see it more as a necessity rather than an option. “From the homeowner's perspective, they will buy and they will pay for the stuff because they don't look at it like, ‘Hmmm, should I choose granite countertops or the fancier cabinets [instead]?' It's looked at like a smoke detector, ‘I have to have that,'” he explains.

McBee says that the discounted financing is an added bonus to using the products because the terms are flexible. Depending on the relationship Chase Home Finance has with a builder, the mortgage product can be set up as either as a primary offering or can be a supplement to any financing deals that builders currently have in place.

“Most builders have a preferred lender; this is an alternative,” she says. “It's not asking [them] to replace what they have, but it's an alternative—if they use the product.”

Although it's too early to evaluate the success of the partnership, if the results come back positive, doors to similar deals in the insurance industry may open.