Penned by Sens. Chris Van Hollen and Jeanne Shaheen, Democrats representing Maryland and New Hampshire, the letter pointed out similar standards were adopted by counterparts at the Department of Housing and Urban Development and the U.S. Department of Agriculture. HUD and the USDA announced their rule change in April. 

A similar move from the FHFA "would support consistency and further the expansion of resilient, energy-saving construction practices across the housing market," the letter stated. The FHFA provides oversight over Fannie Mae and Freddie Mac, which guarantee a majority of U.S. mortgages.  

The letter comes months after a meeting of the Senate Banking, Housing and Urban Affairs Committee when, in response to a question from Van Hollen, FHFA Director Sandra Thompson said her agency would introduce a similar regulation near the end of the second quarter. 

"As we are now rapidly approaching the end of the third quarter, we respectfully request an update on your intended timeline for a decision and for the enterprises to begin implementation," the letter said.  

Van Hollen and Shaheen were joined on the list of co-signers by Democratic colleagues Cory Booker, D-New Jersey; Martin Heinrich, D-New Mexico; Ed Markey, D-Massachusetts; Elizabeth Warren, D-Massachusetts; and Peter Welch, D-Vermont; and Independent Bernie Sanders of Vermont. 

The senators referred to research showing energy-efficiency improvements could lessen the risks to mortgage-backed securities values thanks to better resale prices and a reduction in defaults in periods of economic stress. 

"Aligning new home energy standards with updated model codes will save money for homeowners and renters across the country," the letter said. 

"For a typical home purchased with a 30-year mortgage, energy bill savings more than make up for small increases to down payments and monthly mortgage payments," the senators continued, alluding to data from HUD and the USDA. 

The senators further suggested the current time was "ideal" to update rules, with both the Bipartisan Infrastructure Law and Inflation Reduction Act making $1.2 billion of funding available to states and local governments to update building codes.

Other federal agencies as well as several statutory and local jurisdictions have already updated codes to support the environmental and health benefits of energy efficiency.

"If FHFA also requires updated building codes, it will reduce or eliminate the need for developers to understand numerous different codes."  

The senators' correspondence also received support from research, advocacy and trade groups Americans for Financial Reform, Rocky Mountain Institute and the National Electrical Manufacturers Association. 

Over the past several years, Fannie Mae and Freddie Mac have introduced several initiatives to provide secondary-market offerings supporting investors' environmental and social concerns. This summer, Freddie Mac announced it had issued $1.9 billion in single-family green mortgage-backed securities in 2023. Fannie Mae data shows the amount of the same type of its green MBS issuances last year totaling more than $14.4 billion.