In April 1995, the National Association of State Energy Officials and Energy Rated Homes of America founded the Residential Energy Services Network (RESNET) to develop a national market for home energy rating systems and energy efficient mortgages. RESNET's activities are guided by a mortgage industry steering committee composed of the leading national mortgage executives. The Home Energy Rating System was developed by RESNET to establish a standard for testing homes.

Home energy ratings involve an on-site inspection of a home by a residential energy efficiency professional, a home energy rater. Home energy raters are trained and certified by the operating home energy rating system. As a rule, home energy raters come from either the housing or energy fields. Their backgrounds include experience as home inspectors, appraisers, energy auditors, low-income weatherization contractors, and energy efficient home builders and designers.

The home energy rater inspects the home and measures its energy characteristics, such as insulation levels, window efficiency, wall-to-window ratios, the heating and cooling system efficiency, the solar orientation of the home, and the water heating system. Diagnostic testing, such as blower door for air leakage and duct leakage testing, is often part of the rating.

The data gathered by the home energy rater is input into a computer program and translated into points. The home receives a point score between 1 to 100, depending on its relative efficiency. An estimate of the home’s energy costs is also provided. The home’s energy rating is then equated to a Star rating ranging from a 1 Star for a very inefficient home to a 5 Star for a highly efficient home. Along with the rating sheet, a home owner receives a report listing cost-effective options for improving the home’s energy rating. A HERS rating can also determine if a house qualifies for ENERGY STAR

One of the major differences between a home energy rating and a energy audit or weatherization assessment is that the rating is a recognized tool in the mortgage process. Home energy ratings are valuable to the housing industry and can be utilized in a variety of ways.