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Multifamily Green Financing:
Capturing the Benefits of the
Triple Bottom Line
WegoWise webinar
October 27, 2016
© 2016 Fannie Mae. Trademarks of Fannie Mae. 2
Questions?
Submit at any
time through
GoToWebinar
© 2016 Fannie Mae. Trademarks of Fannie Mae. 3
Today’s Speakers
Karyn Sper
Program Manager, Green Financing
Business, Fann...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 4
Fannie Mae Mission and Portfolio
 Fannie Mae provides liquidity, stability...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 5
Our Green Financing Framework
Fannie Mae Multifamily Green Financing target...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 6
2012-2015
• Piloted Green Financing products
• Launched Green MBS
• Develop...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 7
Simplifying
the Path to
Green
Financing
© 2016 Fannie Mae. Trademarks of Fannie Mae. 8
Green Rewards provides real financial value
Fannie Mae Green Rewards featur...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 9
Green Rewards Additional Terms
Fannie Mae Green Rewards
Minimum Targeted Re...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 10
Ideal Fit for Green Rewards
Properties built 2002 and before
Value-add a...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 11
Reducing water costs, accessing
additional loan proceeds
Green Rewards Loa...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 12
Making significant investments in central
systems, accessing pricing and p...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 13
Access more loan proceeds by underwriting
75% of owner’s cost projection s...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 14
Green Building Certification Pricing Break
 Available for any Fannie Mae ...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 15
Green Building Certification Pricing Break
features
 Preferential pricing...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 16
Measuring Energy Performance in
Multifamily Housing
 Measuring energy per...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 17
Additional Green Financing solutions
 Green Preservation Plus: preserves ...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 18
• Automated data collection
• Building utility analytics
• Multifamily ben...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 19
Benchmarking Data: Green Financing
Compliance
Automated data
collection
© 2016 Fannie Mae. Trademarks of Fannie Mae. 20
Q&A
Submit questions through GoToWebinar
Karyn Sper
Program Manager, Green...
© 2016 Fannie Mae. Trademarks of Fannie Mae. 21
Contact Information
Karyn Sper
Program Manager, Multifamily Green Financin...
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Fannie mae wego wise webinar 10-27-2016

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Fannie mae wego wise webinar 10-27-2016

  1. 1. Multifamily Green Financing: Capturing the Benefits of the Triple Bottom Line WegoWise webinar October 27, 2016
  2. 2. © 2016 Fannie Mae. Trademarks of Fannie Mae. 2 Questions? Submit at any time through GoToWebinar
  3. 3. © 2016 Fannie Mae. Trademarks of Fannie Mae. 3 Today’s Speakers Karyn Sper Program Manager, Green Financing Business, Fannie Mae Dan Teague Vice President of Business Development, WegoWise
  4. 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. 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. 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. 7. © 2016 Fannie Mae. Trademarks of Fannie Mae. 7 Simplifying the Path to Green Financing
  8. 8. © 2016 Fannie Mae. Trademarks of Fannie Mae. 8 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. 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. 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. 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
  12. 12. © 2016 Fannie Mae. Trademarks of Fannie Mae. 12 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. 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. 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. 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. 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. 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
  18. 18. © 2016 Fannie Mae. Trademarks of Fannie Mae. 18 • Automated data collection • Building utility analytics • Multifamily benchmarking 1 Million Units 600 Utility Companies 1.5 Billion Square Feet
  19. 19. © 2016 Fannie Mae. Trademarks of Fannie Mae. 19 Benchmarking Data: Green Financing Compliance Automated data collection
  20. 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. 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

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