Fannie Mae Green Rewards Program

When it’s time to consider investing in a multifamily property, you can count on the experts at LSG Lending Advisors to be your strong advocates. Whether you are choosing a purchase, acquisition, new construction, refinance or rehabilitation, we have the knowledge and hands on experience to guide you through the entire process. We know that every project has its own set of challenges and unique needs, so we take great pride in creating custom made solutions for every client.

  • Over 7 years multifamily property loan underwriting experience.
  • Expert knowledge of financial terms and principles.
  • Highly experienced at guiding clients through complex transactions.
  • In depth analysis of current operating statements and projected financials.
  • Specialists in evaluating third party reports, including appraisals, environmental documents, market studies and project capital needs assessments.
  • Loan review documentation.
  • Tailor fit financing solutions for every client.

Our team has extensive expertise in advising our clients with regard to adhering to FHA/HUD MAP lending guidelines and we also have access to some of the best FHA/HUD MAP approved lenders that the industry has to offer. Give us a call today to learn more about how we can apply our many years of knowledge toward ensuring you a successful multifamily property transaction.

The Fannie Mae Green Rewards program provides tremendous benefits to borrowers who commit to installing capital improvements that target a 25% or more reduction to the whole property’s annual energy or water use. These benefits include a lower interest rate, increased net cash flow by the ability to underwrite a portion of projected energy and water cost savings, and up to 5% more in loan proceeds.

Term Sheet for Fannie Mae Green Rewards

Lien Priority

First lien loans, supplemental loans, and second supplemental loans.

For a second supplemental, 100% of the loan proceeds must go toward green improvement costs.

Availability of
Additional Loan
Proceeds
Up to 5% more than a conventional (non-green) DUS Loan.
Energy and Water
Audit Report
100% paid by Fannie Mae. Report scope equivalent to ASHRAE Level 2 Energy Audit. Loan must close as Green Rewards.
Underwriting 75% of the owner and 25% of the tenant projected energy and water cost savings may be included in the underwritten net cash flow.
Execution Options Green MBS.
Term 5 to 30 years.
Interest Rate Fixed- and variable-rate options available.
Loan Amount No minimum or maximum.
Maximum LTV Varies by asset class and product type.
Minimum DSCR Varies by asset class and product type.
Prepayment Availability Flexible prepayment options available including yield maintenance and declining prepayment premium.
Rate Lock 30- to 180-day commitments. Borrowers may lock the interest rate using the Streamlined Rate Lock option. The Energy and Water Audit Report must be approved by Fannie Mae five days prior to rate lock.
Accrual 30/360 and Actual/360.
Recourse Non-recourse execution is available, with standard carve-outs for “bad acts” such as fraud and bankruptcy required.
Escrows Costs for green investments escrowed at 100%.
Third-Party Reports

Standard third-party reports, including Appraisal, Phase I Environmental Assessment, and a Property Condition Assessment, are required. The Property Condition Assessment must include the High Performance Building module (Energy and Water Audit Report).

Assumption Loans are typically assumable, subject to review and approval of the new borrower’s financial capacity and experience.
Asset Management Property improvements must be completed within 12 months. Lenders will verify the completion of the agreed-upon property improvements. Borrower must report the Property’s annual Energy Performance Metrics, including ENERGY STAR score.

 

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