The U.S. Green Building Council (USGBC) announced today that Fannie Mae will reward multifamily properties with a green building certification, such as LEED, with a lower interest rate. USGBC’s LEED green building rating system is one of several recognized certifications including Energy Star and Enterprise’s Green Communities Criteria.
For these certified properties, Fannie Mae is now granting a 10 basis point reduction in the interest rate of a multifamily refinance, acquisition or supplemental mortgage loan. For example, if the market interest rate is 4% on the multifamily loan, the new rate is 3.9% with this pricing break. On a $10 million dollar loan amortizing over 30 years, the owner would save $95,000 in interest payments over a 10-year term.
All loans financed under this lower interest rate will be also securitized as a Green MBS, growing the total volume of Green Bonds in the market for socially responsible investors to include in their portfolios. Fannie Mae is the leading provider of multifamily financing in the U.S., with a portfolio valued at more than $200 billion.
“This is a great demonstration of leadership from Fannie Mae, and the partnership between the multifamily finance industry and the green building industry,” said Rick Fedrizzi, CEO and founding chair, USGBC. “This is real money and an incentive to not only build green but also for existing buildings to achieve certification. For the first time, Fannie Mae multifamily lenders will be able to reward building owners for their better buildings.”
"Fannie Mae is leading the way in financing by offering new lower interest rates for green building certified multifamily properties,” says Jeffery Hayward, executive vice president for multifamily, Fannie Mae. “We clearly see the value in the triple-bottom line of certified green buildings: financial benefits of lower operating costs for owners and tenants; social benefits of better quality housing for renters; and environmental benefits for everyone. Our lenders are ready with financing solutions to help multifamily owners make their properties more energy and water efficient for today and for the future."
LEED buildings have been proven to have lower monthly energy and water costs, leaving more disposable income for families and creating healthier and more comfortable indoor environments for occupants. In a study from the U.S. Department of Energy it was reported that LEED buildings are estimated to consume 25% less energy and 11% less water, have 19 percent lower maintenance costs, 27 percent higher occupant satisfaction and 34 percent lower greenhouse gas emissions.
For more information on Fannie Mae’s Multifamily Green Initiative, please see www.fanniemaegreeninitiative.com.
Related Stories
Healthcare Facilities | Apr 14, 2022
Healthcare construction veteran creates next-level IPD process for hospital projects
Can integrated project delivery work without incentives for building team members? Denton Wilson thinks so.
Industrial Facilities | Apr 14, 2022
JLL's take on the race for industrial space
In the previous decade, the inventory of industrial space couldn’t keep up with demand that was driven by the dual surges of the coronavirus and online shopping. Vacancies declined and rents rose. JLL has just published a research report on this sector called “The Race for Industrial Space.” Mehtab Randhawa, JLL’s Americas Head of Industrial Research, shares the highlights of a new report on the industrial sector's growth.
High-rise Construction | Apr 14, 2022
Seattle’s high-rise convention center nears completion
The new Washington State Convention Center Summit Building—billed as the first high-rise convention center in North America—is on track to complete most of its construction later this year.
Building Team | Apr 14, 2022
TLC Engineering Solutions, Inc. acquires Moye I.T. Consulting, LLC
TLC Engineering Solutions, Inc. (TLC) is excited to announce that Moye I.T. Consulting, LLC (Moye Consulting) has joined the TLC team, expanding the breadth of its IT and Technology capabilities, as well as its national portfolio.
Wood | Apr 13, 2022
Mass timber: Multifamily’s next big building system
Mass timber construction experts offer advice on how to use prefabricated wood systems to help you reach for the heights with your next apartment or condominium project.
AEC Tech | Apr 13, 2022
Morphosis designs EV charging station for automaker Genesis
LA-based design and architecture firm Morphosis has partnered with automotive luxury brand Genesis to bring their signature brand and styling, attention-to-detail, and seamless customer experience to the design of Electric Vehicle Charging (EVC) Stations.
AEC Tech | Apr 13, 2022
A robot automates elevator installation
Schindler—which manufactures and installs elevators, escalators, and moving walkways—has created a robot called R.I.S.E. (robotic installation system for elevators) to help install lifts in high-rise buildings.
Government Buildings | Apr 11, 2022
Milan’s new US Consulate celebrates Italian design
In Milan, Italy, the new U.S. Consulate General broke ground on April 6. Managed by Overseas Buildings Operations (OBO), a U.S. government agency that directs overseas builds, the 10-acre campus will feature a new Consulate building, as well as the restoration of the site’s historic Liberty Building and reconstruction of a pavilion on the 80,000-square-foot parade ground.
Sponsored | BD+C University Course | Apr 10, 2022
Designing with commercial and industrial insulated metal wall panels
Discover the characteristics, benefits and design options for commercial/industrial buildings using insulated metal panels (IMPs). Recognize the factors affecting panel spans and the relationship of these to structural supports. Gain knowledge of IMP code compliance.
Laboratories | Apr 7, 2022
North Carolina's latest play for biotech real estate development
The Tar Heel State is among a growing number of markets rolling out the welcome mat for lab spaces.