The mortgage industry is focusing on what may be its next money tree: the movement to build and maintain homes in an environmentally sound way.

Fannie Mae, which has embarked on a strategy of mass customization to help expand the mortgage market, has joined forces with the National Association of Home Builders to develop programs encouraging sound environmental use.

Fannie Mae said it will invest $100 million to support these efforts.

The pairing has started to develop programs for six cities- Atlanta; Columbus, Ohio; Albuquerque; Denver; Los Angeles; and Seattle.

Among mortgage programs Fannie is already offering are one to promote energy efficiency by converting energy savings into additional mortgage funds and a location-efficiency effort that rewards homeowners using public transportation in Seattle and the San Francisco Bay area.

Under the latter program, homeowners using public transportation can use their transportation savings to qualify for a larger mortgage. Fannie said this program will be offered in Chicago and other cities.

So-called "green" building-the movement to minimize environmental impact from residential construction-has come into the mainstream in the last six years, said Peter Yost, director of resource and environmental analysis for the NAHB Research Center in Upper Marlboro, Md. The center has published "A Guide to Developing Green Building Programs for Communities."

The research center hopes to create "a larger umbrella of environmental issues that builders can consider," he said. "It's not just the construction of the home; it's the design, and the operation."

Building "green" takes into account issues ranging from how a homeowner will set the thermostat to the types of plants in the yard.

This new consciousness presents "an opportunity for the homeowner and the builder to work together on these issues," Mr. Yost said. "I think it's a huge educational marketing opportunity for the building industry."

And it is a market that Fannie Mae hopes will grow, said Robert Sahadi, vice president for housing impact at the company.

"We realize that one product is not going to serve all," Mr. Sahadi said, explaining that Fannie is working to customize products to communities across the United States based on their unique environmental needs.

Builders, he observed, have been doing "sophisticated things that make communities more livable and attractive. The lending community really hasn't caught up with some of these environmental forces."

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