Apartment properties that are sensitive to the environment are finally getting rewarded. Both Fannie Mae and the Federal Housing Authority are offering programs for loans for green apartments that conserve energy. These apartments are profitable because they have lower utility bills.
“We see a lot of interest from our borrowers,” says Stephanie McFadden, managing director of debt and structured finance in the capital markets group of real estate services firm CBRE.
Not just any apartment building can qualify for these programs by the FHA. According to Florida Realtors, they must be certified and meet a “long list of recognized sustainable development standards, such as the Leadership in Energy and Environmental Design (LEED) standard created by the U.S. Green Building Council.” The FHA will lower the mortgage insurance premium for these properties
“There is a lot of interest from our new construction and substantial rehabilitation clients,” says McFadden.
Fannie Mae’s criteria also involve amount of savings from these energy-efficient buildings. They must reach savings of at least 20 percent in energy or water use, and they will get what Fannie Mae calls “preferential pricing”. They must also reach high building standards like LEED, devised by the United States Green Building Council. Fannie Mae’s Green Preservation Plus system also gives additional loans to improve water/energy use in apartments that qualify as affordable housing. The program was unveiled earlier this year.
“Fannie Mae has done an incredible job of creating a product that is competing with life company lenders in a space that life companies have dominated: new apartments with green designations,” says Charles Halladay, managing director with financial intermediary HFF.
Living and investing in environmentally friendly real estate is important for the future of our planet. With new loans for green apartments, doing this is more feasible. At RE/MAX Paradise, we are excited to help you find an environmentally friendly home in Miami. Contact us today!