Fannie Mae Green Financing
Green Rewards pays for the audit, cuts the rate, and underwrites projected utility savings into net cash flow, which is where the extra proceeds actually come from.
Green Rewards Is a Pricing Product, Not a Grant
Fannie Mae's Green Rewards gives you three things on a multifamily loan: a lower interest rate, up to 5% more loan proceeds, and a free energy and water audit. In exchange you commit to efficiency improvements and you report performance data for the life of the loan.
The proceeds increase is the part sponsors underestimate. Fannie underwrites 75% of the owner-projected and 25% of the tenant-projected energy and water cost savings into net cash flow. Higher underwritten NCF sizes to a bigger loan, and that happens before the rate discount ever shows up.
What Do You Have to Commit To?
Improvements projected to cut the whole property's annual energy or water usage by at least 30% combined, with at least 15 percentage points of that coming from energy. There is no minimum investment per unit. The work must be installed within 12 months of loan origination.
Eligible measures include ENERGY STAR appliances, efficient HVAC, WaterSense labeled low-flow fixtures, LED lighting, and solar photovoltaic systems.
| Additional proceeds | Up to 5% more than a conventional non-green DUS loan |
|---|---|
| Underwriting credit | 75% of owner-projected and 25% of tenant-projected energy and water cost savings included in underwritten net cash flow |
| Term | Five to 30 years |
| Rate | Fixed and variable options |
| Loan amount | No minimum or maximum |
| LTV and DSCR | Varies by asset class and product type |
| Eligible assets | All asset classes with at least 12 months of stabilized residential occupancy. A manufactured housing community qualifies only if solar PV is a selected efficiency measure |
| Lien position | First lien, supplemental, and second supplemental loans. On a second supplemental, 100% of proceeds must fund efficiency improvements |
| Escrows | Efficiency improvement costs escrowed at 125% |
| Execution | Green MBS |
| Pre-review triggers | Loans projecting more than 5% additional proceeds, or including solar PV as a selected measure |
Terms confirmed against the Fannie Mae Green Rewards term sheet at multifamily.fanniemae.com/financing-options/green-financing/green-rewards, fetched July 31, 2026.
What Is the High Performance Building Report?
An energy and water audit with a scope equivalent to an ASHRAE Level 2 audit, and Fannie pays for 100% of it if the loan is delivered as a Green Rewards loan. It identifies the measures, projects the savings, and becomes the basis for the underwriting credit.
If the report finds the property suitable for solar and you elect to install it as a required measure, Fannie also pays for the Technical Solar Assessment in full.
Timing matters at rate lock. If Fannie approval of the HPB Report is required, it must be approved at least five days before rate lock, and a Technical Solar Assessment must be submitted at least 10 days before. Build that into your schedule or you will move your lock.
The Second Green Product
Green Building Certifications is a separate execution that gives preferential pricing on a loan secured by a property that already holds a Fannie Mae recognized certification. No improvement commitment, no audit, no 30% savings threshold. If your property is already certified, this is the simpler path.
Green Rewards is for properties that are not efficient yet and where the capital work is the point.
What Are the Ongoing Obligations?
This is where green financing differs from every other agency product, and it runs for the life of the loan. Improvements must be completed within 12 months of origination and the lender verifies completion. You must report the property's annual energy performance metrics, including its ENERGY STAR score, every year until the loan is repaid. Elect solar and you also report generation.
None of that is onerous, but it is a permanent asset management task. Assign it to someone before closing rather than discovering it in year three.
Does the Math Work?
Usually, and the test is specific. Compare the escrowed cost of the improvements, funded at 125%, against the present value of the rate discount plus the extra proceeds plus the actual operating savings you keep. On a property with 1970s fixtures and owner-paid water, the savings alone often carry it. On a property renovated three years ago, there may not be 30% left to capture.
Run the improved NOI through our DSCR calculator to see what the underwriting credit does to your sizing. For the baseline product these terms sit on top of, see Fannie Mae fixed-rate loans.
Send us the utility history and the property age. We will tell you whether a 30% reduction is realistically reachable on your asset.
Start here
Get a quote on your deal.
Tell us about the property. We respond with sizing, likely executions, and indicative terms. No cost, no obligation.
Prefer to talk? (561) 556-5777