Learn how to unlock competitive loan rates through building efficiency.

1. Multifamily Green Financing:
Capturing the Benefits of the
Triple Bottom Line
WegoWise webinar
October 27, 2016

2. © 2016 Fannie Mae. Trademarks of Fannie Mae. 2
Questions?
Submit at any
time through
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Today’s Speakers
Karyn Sper
Program Manager, Green Financing
Business, Fannie Mae
Dan Teague
Vice President of Business Development,
WegoWise

4. © 2016 Fannie Mae. Trademarks of Fannie Mae. 4
Fannie Mae Mission and Portfolio
 Fannie Mae provides liquidity, stability, and affordability to
the secondary mortgage market
 Fannie Mae’s Multifamily provides financing for:
 Market Rate, Affordable, Seniors, Student, Military, Manufactured Housing,
and Cooperative properties
 Approximately 19% of all U.S. Multifamily Mortgage Debt outstanding as of
Q1 2016
Property
Owner
DUS®
Lender
Fannie
Mae
Multifamily
MBS
Investors
$
Loan
$
Mortgage
$
MBS

5. © 2016 Fannie Mae. Trademarks of Fannie Mae. 5
Our Green Financing Framework
Fannie Mae Multifamily Green Financing targets a
positive, measureable impact to
each pillar of the Triple Bottom Line.
Financial
• Lower credit risk
• Higher cash flows
• Higher property value
Social
• Greater affordability for
tenants
• Higher quality, more durable
housing
• Healthier housing
Environmental
• Lower use of energy, water,
and natural resources
• Greater resiliency to natural
disasters

6. © 2016 Fannie Mae. Trademarks of Fannie Mae. 6
2012-2015
• Piloted Green Financing products
• Launched Green MBS
• Developed ENERGY STAR Score for
Multifamily with US EPA
• Developed High Performance Building
Module scope
2016
Delivered $1.6B
through
September 2016
Building the foundation for Multifamily
Green Financing

7. © 2016 Fannie Mae. Trademarks of Fannie Mae. 7
Simplifying
the Path to
Green
Financing

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Green Rewards provides real financial value
Fannie Mae Green Rewards features
Pricing incentive Up to 39 bps off fixed rate conventional pricing
HPB (Energy and Water Audit) Report Cost 100% paid by Fannie Mae
Credit to Underwritten NCF (optional)
75% of owner projected cost savings and/or
25% of tenant projected cost savings
Additional Loan Proceeds Up to additional 5%, subject to LTV constraints
Green Improvement Escrows
Escrow capital for improvements generally at 100%
of cost
Min. Green Improvement Budget/Unit None
Energy collection requirements for HPB
10% sampling of tenant data required only if
underwriting tenant projected cost savings

9. © 2016 Fannie Mae. Trademarks of Fannie Mae. 9
Green Rewards Additional Terms
Fannie Mae Green Rewards
Minimum Targeted Reduction 20% reduction in energy or water use
Eligibility
Conventional, MAH, seniors, students, military,
coop. MHC excluded.
Pricing Fixed and Variable Rate
DSCR / LTV Standard program requirements
High Performance Building Module Vendors Any vendor that meets Form 4099 requirements
Capital Improvements
Must be completed within 12 month of loan close.
Lender must include list in Repair Agreement.
Report Cost Reimbursement
Loan must commit and deliver as Green Rewards
for cost of HPB Report to be reimbursed
ENERGY STAR® Reporting
Annual reporting of ENERGY STAR Score for life
of loan

10. © 2016 Fannie Mae. Trademarks of Fannie Mae. 10
Ideal Fit for Green Rewards
Properties built 2002 and before
Value-add acquisitions
Capital investment at refinance
Master-metered and tenant sub-metered properties
Looking for extra proceeds and/or better pricing

11. © 2016 Fannie Mae. Trademarks of Fannie Mae. 11
Reducing water costs, accessing
additional loan proceeds
Green Rewards Loan $22.8M, Refinance, Fixed Rate
Property 156 units, 1984 construction
Budget / unit $301
Improvements
Low-flow faucets
Low-flow showerheads
Low-flow toilets
Drip irrigation
ENERGY STAR® washing machines
Additional Loan Proceeds /
Underwriting
$8,253 savings underwritten;
1% additional proceeds
Energy/Water Use Reduction 4% Energy, 20% Water

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Making significant investments in central
systems, accessing pricing and proceeds
Loan $5.6M, Refinance, Fixed Rate
Property 60 units, 1966 construction
Budget / unit $2,300
Improvements
Replace heating plant
Replace hot water boiler
Additional Loan Proceeds /
Underwriting
$23,550 savings underwritten;
2.7% additional proceeds
Energy/Water Use Reduction 23% Energy, 0% Water

13. © 2016 Fannie Mae. Trademarks of Fannie Mae. 13
Access more loan proceeds by underwriting
75% of owner’s cost projection savings
Loan without
Green Rewards
Green Rewards
Total Property Projected Utility Savings $0 $40,000
Owner Credit to NCF $0 $30,000 (75%)
NCF + % of Projected Savings $805,000 $835,000
DSCR 1.25 1.25
LTV 75% 77%
Value at 6% cap rate $13,420,000 $13,420,000
Loan Amount $10,000,000 $10,372,000
% Proceeds over Non-Green Loan 3.7%
Underwriting owner and/or tenant savings is optional.

14. © 2016 Fannie Mae. Trademarks of Fannie Mae. 14
Green Building Certification Pricing Break
 Available for any Fannie Mae Loan on a property with a
current, eligible Green Building Certification
 Conventional or Affordable, First lien or Supplemental
 No restriction on interest rate type, loan term, or loan size
 Eligible Green Building Certifications:
 EarthCraft Multifamily
 ENERGY STAR®
 Enterprise Green Communities
 National Green Building Standard
 Green Globes
 GreenPoint Rated
 LEED

15. © 2016 Fannie Mae. Trademarks of Fannie Mae. 15
Green Building Certification Pricing Break
features
 Preferential pricing reduces the interest rate of most loans
 Up to 39 bps off fixed rate conventional pricing
 Accept internationally recognized certifications
…and more
 Provide longest timeframe for certification to be delivered:
not required until rate lock
No affordability is required to access the
Green Building Certification Pricing Break

16. © 2016 Fannie Mae. Trademarks of Fannie Mae. 16
Measuring Energy Performance in
Multifamily Housing
 Measuring energy performance challenging for multifamily
 Difficulty of obtaining whole building data
 No nationwide data set available
 ENERGY STAR®
 Data set from 2012 Fannie Mae survey used by EPA to develop ENERGY
STAR® 1-100 Score for Multifamily Housing
 Recognized as a 2015 and 2016 ENERGY STAR® Partner of the Year in
Energy Efficiency Program Delivery
 Ongoing Reporting
 Define relationship between financial performance and energy performance
 Annual energy performance reporting required from 1000+ properties
 All Green loans required to report annual energy performance

17. © 2016 Fannie Mae. Trademarks of Fannie Mae. 17
Additional Green Financing solutions
 Green Preservation Plus: preserves quality Multifamily
Affordable (MAH) housing
o Features include 1.15 DSCR, up to 85% LTV, and High
Performance Building Report paid by Fannie Mae
o See Green Preservation Plus term sheet
 C-PACE Consent: permits subordinated loans originated
through Commercial Property Assessed Clean Energy
programs

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• Automated data collection
• Building utility analytics
• Multifamily benchmarking
1 Million Units
600 Utility Companies
1.5 Billion Square Feet

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Benchmarking Data: Green Financing
Compliance
Automated data
collection

20. © 2016 Fannie Mae. Trademarks of Fannie Mae. 20
Q&A
Submit questions through GoToWebinar
Karyn Sper
Program Manager, Green Financing
Business, Fannie Mae
Dan Teague
Vice President of Business Development,
WegoWise

21. © 2016 Fannie Mae. Trademarks of Fannie Mae. 21
Contact Information
Karyn Sper
Program Manager, Multifamily Green Financing Business
Karyn_Sper@Fanniemae.com
Dan Teague
Vice President of Business Development
Dteague@WegoWise.com