Fannie Mae to give sustainable multifamily properties lower interest rates
Builders looking to erect multifamily structures that feature energy-efficient features such as green HVAC will now be rewarded with lower interest rates from Fannie Mae.
The government-sponsored lending enterprise said it will give green-certified properties with lower interest rates. The U.S. Green Building Council’s Leadership in Energy and Environmental Design are among the sustainable certifications that qualify for the lowest rates. Others include Energy Star.
Fannie Mae will give a tenth of a point reduction in the interest rate of a multifamily refinance, purchase or supplemental mortgage loan. For example, if a market rate interest rate is 4 percent, the property could earn a 3.9 percent interest rate with this program. On a $10 million, 30-year loan, the owner would save $95,000 in interest payments over a 10-year term, the USGBC said.
“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, the USGBC’s CEO and founding chairman. “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.”
Jeffery Hayward, Fannie Mac’s executive vice president for multifamily properties, said the lender was excited about the program.
“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,” Hayward said. “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."
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