Fannie Mae has completed the issuance of $100 billion of green multifamily mortgage-backed securities (MBS), which have helped to create a more sustainable future for communities. This milestone shows how the government-sponsored enterprise’s (GSE’s) scale and capacity have fostered liquidity to aid in the greening of the nation’s housing stock.
For more than a decade, Fannie Mae has been a leader in providing green housing mortgage financing to make multifamily housing more energy efficient. Its multifamily green financing program has supported more sustainable and affordable housing for residents in properties financed through the GSE’s Green Building Certification program and its green property improvement program, Green Rewards.
Fannie Mae provides an opportunity for investors to support green housing finance by enabling them to invest in MBS backed by multifamily properties that meet energy- and water-efficiency standards.
“As one of the largest issuers of green bonds worldwide, we have fostered a liquid market to support additional green financing and have developed a template for the multifamily marketplace that has attracted investors with its rigor and transparency,” says Michele Evans, executive vice president and head of multifamily at Fannie Mae. “We want to thank the support of our Delegated Underwriting and Servicing lender partners who worked closely with us to introduce our innovative green financing to the marketplace and helped us attain this notable milestone.”
Evans says it’s exciting for Fannie Mae to see what it has been able to accomplish with the $100 billion announcement, including improving overall assets, helping reduce the carbon footprint, and enhancing housing to benefit residents and surrounding communities.
“This milestone demonstrates our commitment to thinking about environmental enhancements and how they support sustainability. When you start to improve the environmental footprint, you get the opportunity to have a meaningful impact on the amount of money a renter may save,” she says.
Evans adds that the projected savings from energy- and water-efficiency improvements through Fannie Mae’s green financing has been approximately $184 on an annual basis for renters, a huge benefit in terms of affordability.
“It’s really an opportunity for residents to realize savings, and that money can go a long way with health care, doctor’s appointments, and food on the table,” she says.
The milestone also reflects the increase in awareness of environmental, social, and governance (ESG) as an investment group, says Lisa Bozzelli, senior director at Fannie Mae Multifamily.
“The European market was there much earlier,” she says. “But in the past 18 months, we have seen domestic investors pay far more attention to ESG as an investment class.”
In addition to multifamily, the GSE introduced green MBS that is backed by newly constructed single-family residential homes with green building certifications that meet or exceed Energy Star 3.0 requirements. As of the end of November, it had issued 44 transactions pooling loans for single-family totaling $486 million.