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Multifamily lender lowers interest rates for LEED-certified projects

As part of its Multifamily Green Initiative, Fannie Mae is granting a 10 basis point reduction in the interest rate of a refinance, acquisition or supplemental mortgage loan for a multifamily property carrying certification or recognition under U.S. Green Building Council LEED, EPA Energy Star or Enterprise Green Communities programs. On a $10 million dollar loan amortizing over 30 years, an owner could save $95,000 in interest payments across a 10-year term based on 3.9 percent versus 4 percent market rate.

“This is a great demonstration of leadership from Fannie Mae, and the partnership between the multifamily finance and green building industry,” says USGBC CEO Rick Fedrizzi. “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.”

“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,” adds Fannie Mae Executive Vice President for Multifamily Jeffery Hayward. “Our lenders are ready with financing solutions to help multifamily owners make their properties more energy and water efficient for today and for the future."

All loans financed under the lower interest rate will be also securitized as a Green MBS, growing the total volume of Green Bonds in the market for socially responsible investors to include in their portfolios. Fannie Mae is the leading provider of multifamily project financing in the U.S., with a portfolio valued at over $200 billion.

A U.S. Department of Energy study finds that LEED certified buildings, compared to conventional projects, consume an estimated 25 percent less energy and 11 percent less water, have 19 percent lower maintenance costs, 27 percent higher occupant satisfaction, and 34 percent lower greenhouse gas emissions. — www.fanniemaegreeninitiative.com


LEED certification strongest in Illinois; gaining in the South and Southwest

Now in its fifth year, the U.S. Green Building Council’s Top 10 States for LEED Green Building Per Capita in Nation ranking is based on 2010 U.S. Census data and includes commercial and institutional green building projects that were certified throughout 2014. Illinois retained its top national position for a second consecutive year, with 174 LEED certifications representing 3.31 square feet of LEED-certified space per resident.

List newcomers Georgia and Arizona show that 2014 was a year of growth for LEED adoption in the South and Southwest, while the continued strong performance of Washington, D.C., Maryland and Virginia have helped the Mid-Atlantic region remain the country’s epicenter of green building. While not included on the official list of top states due to its status as a federal territory, the District of Columbia is notable as it continues to lead the nation with 29.44 square feet of space per resident certified in 2014. Maryland and Virginia finished third and fourth, respectively, and both states increased their per capita totals to 2.70 and 2.33 square feet of LEED space per resident in 2014.

The 2014 list had the highest average (2.34) of per capita space certified per resident per state since 2010, and the second highest average to date. Six of the eight states—Illinois, Colorado, Maryland, Virginia, Massachusetts and Hawaii—returning to last year’s top 10 ranking from 2013 increased the amount of square feet of certified space per resident. Illinois and Colorado are the only two states to make the list every year since 2010.

USGBC calculates the list using per-capita figures as a measure of the human element of green building, allowing for a fair comparison of the level of green building taking place among states with significant differences in population and, accordingly, number of overall buildings.

In 2014, LEED for Building Operations and Maintenance was once again the most popular rating system within the top 10 states, representing 48 percent of the total square footage certified. LEED for Building Design and Construction was the second most popular rating system in the top 10, representing 46 percent of the square footage certified and LEED for Interior Design and Construction was the third most popular rating system, representing 6 percent of total square footage certified in these states in 2014.

Collectively, 1,662 commercial and institutional projects became LEED certified within the top 10 states in 2014, representing 251.7 million square feet of real estate. Worldwide, 4,502 projects were certified in 2014, representing 675.7 million square feet. More than 26,600 projects representing 3.6 billion square feet of space have been LEED-certified to date, with another 42,000 projects representing 8.8 billion square feet in the pipeline for certification.

USGBC launched LEED v4, the newest version of the rating system, in the fall of 2013. The latest version continues to raise the bar for the entire green building industry, which Forbes Magazine projects could be worth up to $960 billion globally by 2023. LEED v4 features increased technical rigor; new market sector adaptations for data centers, warehouses and distribution centers, hospitality, existing schools, existing retail and midrise residential projects; and, a simplified submittal process supported by a robust and intuitive technology platform.