HUD & Fannie Mae Offer Green Refinance Plus Program

As part of the Fannie Mae/Federal Housing Administration (FHA) Risk-Share program, the recently established Green Refinance Plus program promotes the inclusion of energy- and water-saving upgrades in existing affordable rental housing by creating additional loan proceeds through lower debt service coverage and higher loan-to-value ratios. This new preservation tool is available for multifamily rental properties that are at least 10 years old and maintain affordability restrictions at least through the term of the new loan. In exchange for the ability to obtain refinancing, owners must agree to spend at least 5% of the loan proceeds on overall rehab and green retrofits identified using the required green needs assessment. Through its network of lenders, Fannie Mae expects to initially dedicate $100 million toward individual loans in the $3.5 to $5 million range, with FHA insuring up to an additional 4-5% of the loan amount. The program represents both another tool for preservation of existing affordable housing and a means of providing green retrofit funding for older buildings that often struggle to secure funds for such purposes. Click here for more information.

— Posted on 6/09/2011