Sol Rosenbaum, Director of Energy Services, GRS Group, an NV5 Company
With interest rates rising, taking advantage of the Fannie Mae and Freddie Mac green loan programs when purchasing or refinancing a multi-family property may be the ideal way to knock down your interest rate.
Have Questions? Here are some of the basics:
Who Is eligible? The program is open to multifamily properties of all sizes with minimal restrictions. We have worked on properties with as few as 12 units as well as ones with 500+ units.
In one sentence, can you explain the program? You invest in energy and water savings measures to meet the minimum thresholds for the program to receive a lower interest rate.
What are the inspection requirements? The green loan analysis can be part of an (Environmental Site Assessment) ESA or Property Condition Assessment (PCA) inspection or performed as a separate Green Assessment. During the inspection, our field professional will gather additional details and run some non-invasive tests.
What additional information will I need to provide? The major additional requirement is historical utility data. Other documentation includes standard PCA due diligence data collection.
What if the tenant pays utilities directly? Not a problem at all. That is one of the most unique features of this program. The minimum energy or water savings must be reached, but it can be a combination of either party that recognizes these savings.
Can I combine this with planned capital expenditure (CapEx)? Yes. A good rule of thumb: if you plan on doing CapEx that could impact energy or water use, do NOT begin that work until after the loan has closed so you can take advantage. However, do let us know about it to verify the savings potential is analyzed.
What are some common projects that qualified participants implement? Low-flow water devices (showers, sinks, toilets), smart thermostats, and lighting upgrades are often the biggest bang for your dollar, but the program allows for ANY measure to be considered if it saves energy or water.
What will this cost me? The cost of the inspection and report is reimbursed by Fannie/Freddie at the close of the Green Loan. Implementation costs will depend on the measures implemented to hit the 30% savings.