Together, Fannie Mae and HUD/FHA have developed the Green Refinance Plus Program for affordable housing properties to help owners get the funds needed to make upgrades that reduce energy consumption and complete other property renovations that both help the environment and lower annual operating costs. Only available through Fannie Mae lenders, borrowers can take advantage of this program to fill the funding gap that often arises when refinancing.

Advantages/Highlights

• Lower debt service coverage ratio (DSCR) and higher loan-to-value (LTV) ratios generate extra loan proceeds to ensure ongoing property condition
• Property owners can select the energy-efficiency upgrades that best suit the property with the help of a "Green Physical Needs Assessment"

Eligibility

• Property must be at least 10 years old, with a recorded use agreement of the affordability restrictions that extends for at least the term of the new loan to help preserve affordable housing
• At least 5% of the refinance loan proceeds must be applied to property renovation or energy retrofit and must enhance value and improve property operations

Loan Structure

• Loan amount: Minimum $5.0 million
• Term: Must have 10-year term or more
• Maximum LTV: 85%
• Minimum DSCR: 1.15x
• Amortization: Up to 30 years
• Interest rates: Must be fixed-rate with no interest-only period
• Non-recourse except for standard carve-out provisions
• Assumptions: May be assumable with consent of Fannie Mae and payment of a 1% transfer fee
• Escrows: Replacement reserve, tax, and insurance escrows
• Third-party reports: Appraisal, “Green Physical Needs Assessment” (Green PNA), and Phase I Environmental Assessment