Apartment investors have been taking advantage of low interest loans through the “green financing” programs offered by Fannie Mae and Freddie Mac. “About 40 percent of our Fannie Mae and Freddie Mac business is green,” says Kyle Draeger senior managing director in the multifamily division of real estate services firm CBRE.
The loans have proven to be extremely useful to value-add investors, who typically renovate properties to improve the income produced by the apartments. So many borrowers qualified for the green incentives in 2017 that federal regulators have raised the requirements for new loans in 2018, and so far this year the green lending business still seems to be going strong.
The “green” programs often slice roughly a third of a percentage point off interest rates offered by the government-sponsored entities (GSEs).
Also published on Medium.