WHILE MOST CONSTRUCTION UPGRADES are fueled by homeowner demand, the mortgage industry is using its clout to force another: mold-resistant building materials. Environmental Assurance Group's Charles Perry, who works with mortgage lenders on mold liability and risk mitigation, says some lenders will roll out mold prevention standardized protocol for building practices and materials by winter. “Things are going to start to change on the mold front,” he says. “Lenders are tired of losing money.”
Because lenders often finance the majority of a homeowner's mortgage or a builder's project loan, the lender ultimately carries the majority of the risk associated with mold. Severe mold damage can devaluate a property, thus making the lender lose on its investment.
Many lenders will make changes to loan requirements to include mold prevention strategies. For the home buyer, that may mean a better interest rate and a chance to have mold insurance, which is something that most insurers have restricted because of mold's high incidence rate and pricey clean-up costs.
For builders, these new construction requirements come at a cost. But Perry is confident that home buyers will opt for the construction upgrade when they weigh the financing and insurance benefits. “There's an 80 [percent] to 90 percent chance of reducing mold for the same cost as [choosing to] upgrade a sink and two light fixtures,” he says.