What type of home purchase is likely to be seen as a compensating factor for a loan application?

Buying an energy-efficient home is likely seen as a compensating factor for a loan application because energy efficiency can contribute to lower utility costs and overall lower living expenses. Lenders recognize that a home with energy-efficient features tends to have reduced operating costs, which enhances the borrower's ability to manage monthly mortgage payments. This financial benefit supports the borrower's capacity to repay the loan, making the application more attractive to lenders.

Additionally, properties that meet energy-efficient standards can sometimes fall under specific financing programs that encourage sustainable living, further boosting their appeal in the loan approval process.