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US green buildings to attract lower interest rates

Leilani Apartments, a LEED-rated multi-residential development in Seattle.

The US Federal National Mortgage Association, Fannie Mae, has announced it will provide lower interest rate loans to green multi-residential buildings.

For buildings with a green building certification, Fannie Mae is granting a 10 basis point reduction in the interest rate of a multifamily refinance, acquisition or supplemental mortgage loan.

“This is a great demonstration of leadership from Fannie Mae, and the partnership between the multifamily finance industry and the green building industry,” Rick Fedrizzi, chief executive and founding chair of the US Green Building Council, said. “This is real money and an incentive to not only build green but also for existing buildings to achieve certification. For the first time, Fannie Mae multifamily lenders will be able to reward building owners for their better buildings.”

Jeffery Hayward, executive vice president for multifamily at Fannie Mae said the organisation was leading the way in financing through its low interest rate offering.

“We clearly see the value in the triple-bottom line of certified green buildings: financial benefits of lower operating costs for owners and tenants; social benefits of better quality housing for renters; and environmental benefits for everyone,” Mr Hayward said.

Boost to green bonds

All loans financed under the lower interest rate will be securitised as green mortgage-backed securities, growing the total volume of green bonds in the market.

Fannie Mae provided $28.9 billion in financing to the multifamily market in 2014, working with lenders to finance 446,000 multifamily housing units.

Comments

One Response to “US green buildings to attract lower interest rates”

  • John Bergin says:

    Great to see Australia’s Bankmecu has gone one better…… lower rates and a biodiversity offset directly linked to new home construction finance via its very own conservation landbank !

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