The Green Refinance Plus program, a new refinancing option from Fannie Mae and the U.S. Department of Housing and Urban Development (HUD), provides resources to multifamily properties to make energy efficiency and other needed renovations, which will help reduce long-term operating costs.
Budgets for maintaining or making physical improvements at multifamily properties are often tight, and more pressing renovations frequently overshadow energy efficiency initiatives. The Green Refinance Plus program enables owners of affordable multifamily properties that are 10 or more years old to borrow an additional 4 to 5 percent in loan funds to make improvements that will save energy and water costs for tenants and owners.
Examples of these improvements include purchasing ENERGY STAR® qualified products and appliances, installing advanced HVAC and lighting controls, and completing other renovations that will increase energy and water efficiency. Fannie Mae and HUD anticipate loan amounts varying between $3.5 and $5 million as the program begins, totaling nearly $100 million in initial refinance volume. Of these loans given for refinancing, at least 5 percent of the total amount must be directly allocated to renovations or efficiency upgrades.
Three third-party reports are required for consideration in the program:
- A Green Physical Needs Assessment
- An appraisal
- A Phase I Environmental Assessment
To ensure the documentation of energy and financial savings, all properties in the program will benchmark their energy use in EPA’s online energy measurement and tracking tool, Portfolio Manager; maintain an accurate account of the property in Portfolio Manager; and submit an annual Statement of Energy Performance, generated by Portfolio Manager, to Fannie Mae through the life of the loan.
For more information on these new programs, please visit Fannie Mae or the U.S. Department of Housing and Urban Development. An updated and accurate Portfolio Manager account will be necessary to enroll in the program.
TRC Energy Services has compiled a comprehensive listing of finance options and tools to assist multifamily owners in expanding their renovation budget to include energy efficiency measures.