The Department of Housing and Urban Development has partnered with Fannie Mae to develop Green Refinance Plus. This program allows owners of existing affordable rental housing properties to obtain mortgage refinancing that also includes funding for energy and water conservation upgrades, as well as other necessary property renovations.
HUD says the program is intended to refinance the expiring mortgages of Low Income Housing Tax Credit and other affordable projects and to lower annual operating costs by reducing energy consumption; FHA will insure additional small percentages of a loan amounts so that the homeowner can obtain funds to make property improvements and renovations, including those for water and energy conservation.
“Green Refinance Plus supports Fannie Mae’s ongoing commitment to creating a more sustainable rental housing market that is affordable to low- and moderate-income families. This program will provide more renters with renovated apartments in which to live, allow building owners to better manage their energy costs, and help communities by reducing the environmental footprint of our rental properties,” said Fannie Mae’s Executive Vice President for Multifamily Business Ken Bacon.
In order to qualify for the program, says HUD, the property in question must be at least 10 years old, with a recorded use agreement of the affordability restrictions that extends for at least the term of the new loan to help preserve affordable housing; at least 5% of the refinance loan proceeds must be applied to property renovation or energy retrofit; and all rehabilitation and energy improvements must enhance value and improve property operations.
Fannie Mae will offer Green Refinance Plus through its networks of Delegated Underwriting and Servicing (DUS®) and Special Affordable lenders, says HUD, and Fannie Mae and FHA will share the risk on the refinancing loans and extra funds borrowed by homeowners to make the energy-conserving upgrades.
June marks the first month that Fannie Mae and its participating lenders will accept loan applications for both refinancing and making homes more energy efficient.
View more about the program.
Written by Alyssa Gerace