In December, President Obama’s Better Buildings Challenge expanded to multifamily housing to increase energy efficiency for the 20 million families that live in rental apartments and condos.
Now, Freddie Mac announced that it will also work toward making multifamily buildings more water and energy efficient through a partnership with EPA’s Energy Star program.
"As one of the largest Commercial Mortgage-Backed Securities
(CMBS) issuers in the country, we are looking to guide the industry and the CMBS market towards a greater sensitivity to environmentally responsible lending and investing. This partnership is the first of what we hope are many steps in that direction.
"We are looking at how energy efficiency improves the
financial viability of the apartments we finance, and most importantly its impact on the affordability of rental housing," says Mitchell Resnick, vice president of loan pricing and securitization for Freddie Mac Multifamily.
Roughly one-third of Americans live in apartments, spending a total of $22 billion on energy a year. The goal is for these properties to become 30% more efficient by 2020, which would result in annual energy savings of $9 billion, while cutting more than 35 million metric tons of greenhouse gas emissions a year.
Freddie Mac says it is considering collecting energy and water consumption data from property owners during the loan underwriting and asset management processes.
By demonstrating the financial value of energy and water efficiency to lenders and borrowers, Freddie Mac believes it can influence lending practices in ways that encourage investments in energy efficiency and make
multifamily housing units more affordable.
EPA will provide technical and educational support in the use of Energy Star Portfolio Manager® which makes it easy to track energy consumption and management.
Under the Better Buildings Challenge, building owners pledge to reduce energy consumption across their portfolios by 20% within 10 years. They also commit to share best practice strategies that can be substantiated with energy data.
Since its launch in 2011, the program has delivered $2 billion in private financing for energy upgrades for commercial and industrial buildings – 2 billion square feet. The next step is multifamily buildings.