The U.S. Housing and Urban Development Department (HUD) announced a new refinancing program that could boost energy efficiency in older affordable housing.
Owners of older multifamily affordable properties often find it difficult to get financing to maintain or improve the physical condition of their properties, including making energy-efficient upgrades.
Owners of newer properties typically refinance their mortgages every 10-15 years to make improvements.
The Green Refinance Plus program, to be administered by HUD’s Federal Housing Administration (FHA) and Fannie Mae, will make that financing available to owners of older properties. They anticipate approximately $100 million in initial refinance volume with an average loan amount of $3.5 to $5 million.
FHA and Fannie Mae will share the risk on loans to refinance existing rent-restricted projects, and owners will be able to borrow additional funds to make energy- and water-saving improvements to their properties.
Fannie Mae and its participating lenders will begin accepting applications soon.
The initiative is intended to refinance the expiring mortgages of Low Income Housing Tax Credit properties, and other affordable projects, and to lower annual operating costs by reducing energy consumption.
FHA has been under intense criticism from energy efficiency and renewable energy advocates over the last year after killing PACE, a popular program for financing home energy improvements.
Property Assessed Clean Energy (PACE) financing was rapidly sweeping the nation as "one of the most innovative municipal finance programs in modern history," according to The Harvard Business Review.
It had spread to 25 states, but growth was abruptly halted on July 6, 2010 when the Federal Home Finance Agency (FHFA), caretaker of Freddie Mac and Fannie Mae, summarily announced it would no longer honor mortgages with PACE liens securing residential energy improvements.
Loading...