Fannie Mae announced the expansion of a loan option that provides funding for the refinance, preservation, and energy-efficient retrofits of older affordable multifamily housing properties.
Green Preservation Plus, formerly known as Green Refinance Plus, offers financing to owners to acquire affordable housing developments or refinance existing Fannie Mae mortgage loans. The expansion will provide additional loan proceeds through lower debt service and higher loan-to-value ratios. Owners may use these additional loan proceeds to rehabilitate or improve energy and water efficiency of the property.
Owners may now access the property’s equity in an amount up to the cost of the energy- and water-saving improvements being financed. Up to 5 percent of the loan amount can be added to the mortgage loan to pay for energy- and water-saving improvements.
Property owners will obtain a standard Fannie Mae Physical Needs Assessment with the High Performance Building Module. This assessment will identify property improvements that reduce energy and water operating costs and consumption, and help borrowers make rehabilitation choices that will give them the greatest energy and water savings for their investment. Based upon the assessment, property owners may select energy- and water-efficiency upgrades that make the most economic sense for their properties.
The announcement was made in collaboration with the Department of Housing and Urban Development (HUD).
Green Preservation Plus is an enhancement of the Fannie Mae and HUD/Federal Housing Administration Risk-Sharing Agreement program. Since the inception of its multifamily green initiative, Fannie Mae has issued more than $150 million in Green MBS which include Green Preservation Plus loans.