Just last week, Fannie Mae published new changes to their Green Financing program that further entice borrowers to utilize their green lending products. Fannie Mae has committed to paying for the ASHRAE Level II study required as part of the energy and water efficiency analysis for loans made through their green initiative. As mentioned on the Fannie Mae Multifamily Green Financing webpage, Fannie Mae will reimburse borrowers 100% of the cost of the assessment used for the approved loan.
Other Key Revisions
Another significant enhancement made to the Green Rewards product offering now allows for 75% of owner-paid savings and 25% of tenant projected cost savings to be underwritten compared to the formulaic computation that allowed up to 50% for owner- and tenant-paid savings that was available before this latest change.
Prior to the changes, benchmarking for the High Performance Building Module (HPB) required the collection of utility bills from 10% of the tenants if the property wasn’t mastered metered. Now, tenant utility bill collection is only required if the borrower wants to underwrite tenant projected cost savings. This change makes it easier for acquisition deals that are typically under a tight due diligence period to qualify for the Green Rewards. No change has been made to the annual ENERGY STAR® Score reporting requirement using 10% tenant utility data after the energy and water efficiency work has been implemented.
Fannie Mae’s full suite of Green Financing products now includes Green Rewards, Green Building Certification Pricing Break, Green Preservation Plus, and a new offering known as Commercial Property Assessed Clean Energy (C-PACE) consent. By re-evaluating and enhancing their product lines, Fannie Mae is tailoring its programs to meet the needs of, and further attract, owners of multifamily properties to invest in strategic green improvements.
The Rise of Multifamily Green Financing
HUD and Freddie Mac are also offering green lending options making green lending competitive within the multifamily market. As agencies continue to update and enhance their offerings, borrowers now have more options to choose from that best meet their needs. Fannie Mae, HUD, and Freddie Mac provide lending to over 50% of the multifamily market, making green lending a significant game changer.
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August 03, 2023
Since the signing of the Inflation Reduction Act (IRA) in late summer 2022, the commercial real estate industry has been aglow from the potential for much-needed funding to support their ventures and bolster transaction volume. The overall goal and mission of the many Partners, such as investors, developers, owners, and government entities, particularly in multi-family, is to address the nationwide affordable housing shortage. The HUD Green and Resilient Retrofit Program (GRRP) is the latest example that embodies the push to modernize the most important sector in multi-family development.
September 29, 2023
For property owners considering EV charging infrastructure on their properties, the multiple benefits and incentives justify the initial costs.
October 02, 2023
When exploring the possibility of installing a ground-mount solar system, individuals and businesses may have questions. Here are some frequently asked questions about getting ground-mount solar systems...
