Symmons Blog

Green Financing Options for Multifamily Property Owners Performing Building Upgrades


Green investments are gaining in popularity in the multifamily housing sector as apartment property owners are finding a range of loan financing options through Freddie Mac and Fannie Mae’s green incentive programs. Look over these programs to decide on which one you may qualify for when renovating your building.

Green Assessment and Green Assessment Plus

To determine what types of improvements will help save on water and electricity consumption, Freddie Mac offers these cost-effective assessments of your multifamily property under the Multifamily Green Advantage Program:

  • Green Assessment is their regular straight-forward analysis report
  • Green Assessment Plus gives a more in-depth analysis based on an ASHRAE (American Society of Heating, Refrigerating and Air-Conditioning Engineers) level 2 energy audit

You can get reimbursed for your assessment report costs, up to $3,500, if you decide to close on a loan from the Freddie Mac Multifamily Green Advantage Program.

Green Up and Green Up Plus Loans

So you obtained the Green Assessments through Freddie Mac. Now, which loan program should you pick? Freddie Mac offers two loan programs, Green Up and Green Up Plus, based on which type of assessment you paid for and what type of improvements you committed to when renovating your multifamily property. Here are a few advantages of these loan programs:

  • You can obtain better loan pricing when closing the loan after getting an assessment
  • If selecting the Green Up loan after getting a Green Assessment, you’ll get more funding, as they will underwrite up to 50% of your projected energy savings
  • If selecting the Green Up Plus loan after receiving the Green Assessment Plus analysis report, Freddie Mac will provide more funds while underwriting up to 75% of your projected energy savings

To meet both loan requirements, you have to commit to some of the improvements on the assessment reports and have your multifamily property save up to 25% in water and electricity usage.

Green Certified

If you already received one of eight green building certifications through an eligible industry-standard green building organization, you can receive special discounted loan pricing. Some requirements include:

  • The multifamily property must offer affordable rental units
  • You must complete the affordability test to see which certification applies to your building
  • After receiving green building certification, you have to provide the certification evidence during loan application submission to access a financing quote.

Green building certifications that are approved for the Green Certified loan program include: ENERGY STAR® for multifamily buildings, LEED certification, ENERGY STAR® for qualified multifamily high-rises, EarthCraft certification, Green Communities certification, GreenPoint Rated certification, Green Globes certification, and the National Green Building Standard certification.

Green Rewards

Through Fannie Mae, your multifamily property may qualify to receive better loan options through the Green Rewards program. Similar to the Green Up program offered by Freddie Mac, if you have an existing multifamily property and you plan to reduce your water and electricity usage by making the necessary improvements, you could receive:

  • Better loan pricing quotes
  • Anywhere up to 5% more in additional loan proceeds
  • Up to 75% underwriting savings based on the property owner’s projected improvement costs
  • Another 25% underwriting savings for the tenant’s projected costs
  • A free ASHRAE Level 2 Energy Audit analysis if selecting and closing on a Green Reward loan

When you get a Green Reward loan, the loan will be disclosed on the bond market as a Green MBS, which is a single asset, fixed income security instrument that can help you raise capital.

Green Preservation Plus

Instead of doing major renovations, you may decide to just switch out existing fixtures with newer fixtures to reduce energy and water costs. The Green Preservation Plus loan is the perfect option for your multifamily property. You’ll get:

  • Better pricing options
  • A free ASHRAE Level 2 energy audit report
  • A debt service coverage ratio (DSC) of 1.15% to get better approval for business loans
  • A loan-to-value ratio (LTV) of 85% to receive better loan rates
  • Green MBS disclosure on the bond market

After reviewing all the fantastic loan programs, you may feel like none of them fits into your specific financing needs. This situation is especially true if you already have a multifamily building that has an ENERGY STAR® or LEED green building certification. Yet there are rewards and benefits specifically for you. You may qualify for better interest rates for loans by taking part in the Green Building Certification Pricing Break program.

Once you have your loan financing taken care of, you will need to start designing all the green renovation project details so you can start saving water and electricity throughout your rental apartments. Taking the customization route in your renovation designs can allow you to decide on fixtures that are a better fit for your multifamily property and will allow you to receive the green investment cost savings you desire. To get started finding the right energy-efficient plumbing products for your multifamily building, reach out to Symmons today to make the smart choice.

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