Fannie Mae today announced Green Rewards, a new multifamily financing option that helps owners of apartment buildings and cooperatives invest in energy- and water-cost saving improvements. These investments can improve and preserve the quality of multifamily properties and lower utility costs, saving money for both property owners and renters. Green Rewards is available today nationwide.
“Green Rewards does just that, it rewards borrowers for investing in smart property improvements by giving owners a lower all-in interest rate and access to more loan dollars,” said Jeffery Hayward, Executive Vice President and Head of Multifamily at Fannie Mae. “The resulting greener property really has rewards for all of housing’s stakeholders: it means increased cash flows for the owners, lower utility expenses and better quality housing for tenants, and a high quality asset backing our MBS for investors.”
Green Rewards provides property owners with both extra loan proceeds and a lower all-in interest rate. For example, a multifamily property seeking to refinance a $10 million loan could receive an additional $250,000 in loan proceeds to make energy- and water- saving improvements that will reduce its annual $140,000 energy and water costs by 30 percent. Green Rewards includes a portion of the owner’s and the tenant’s projected energy- and water-cost savings in the loan’s underwriting, resulting in greater loan proceeds than a typical loan. In addition, Green Rewards reduces the all-in interest rate by 10 basis points; on the same $10.25 million loan this could result in savings of more than $98,000 in total interest over the 10-year loan term.
With Green Rewards, property owners can make smart investments that reduce energy and water expenses, generate electricity or result in a third-party green building certification, including installing ENERGY STAR® certified HVAC systems, electricity-generating solar panels, water-reducing irrigation systems, or applying for a Green Building Certification, such as ENERGY STAR®or U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification.
Link to full press release.