As I mentioned in my last article (Incentivizing Landlord Investment in Green Projects, EVEN When It is the Tenant That Saves Energy), Fannie Mae and Freddie Mac offer generous incentives for financing multifamily properties.
Under their revised guidelines issued late last year, properties must reduce either energy or water usage by 25 percent in order to qualify for their Green Programs. While this represents a higher savings level than the initial program requirements, there are no longer requirements regarding the minimum property age or minimum investment amount.
Determining whether your property will qualify for incentives under either program requires that a “Green Assessment” be conducted by a qualified consultant. This assessment involves four primary steps:
- Site inspection – Data from energy and water usage devices is collected and field measurements of various items are taken. The inspection is similar to a standard due diligence inspection with several additional items and details noted.
- Utility analysis – GRS will request historical usage data and operational expense details regarding the site. A review of the historical utility usage is performed in order to set a baseline usage from which to determine savings.
- Savings measure analysis – The first two items noted are the foundation of any green project. At this point, we can evaluate what energy or water savings opportunities are possible and perform calculations to determine the energy/water and cost savings.
- Report presentation – The data is collected and the measures have been calculated. Now it is time to package everything into a straightforward report to present the findings.
Will Your Building Qualify?
That’s the golden question. While the process is not too onerous, wouldn’t it be nice to know if you are likely to qualify before embarking on this process? GRS Group has extensive experience conducting these assessments and our experience tells us that properties with certain characteristics are highly likely to qualify. Our brief questionnaire goes over the following items:
- Construction date and renovation history
- Unit types and occupancy
- HVAC systems and controls
- Lighting lamps & fixtures
- Water end use devices
- General discussion about other MEP equipment
We have developed a quick pre-screen tool where we can provide greater certainty regarding your property’s likelihood of qualifying for either the Fannie Mae or Freddie Mac program.
Want to hear more or discuss a specific property? Please be in touch at firstname.lastname@example.org to get the ball rolling.
About the Author: Sol Rosenbaum, PE, CEM, CPMP is the Director of Green & Energy Projects for GRS Group. He has over 15 years experience in the energy engineering field covering all aspects of their implementation. Please be in touch if you have any questions about this program or other related green projects. Sol can be reached at 646-828-9048.
About GRS Group:
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.