Freddie Mac Loan Incentives for Resource Efficient Multifamily Developments 

Green Benefits for Freddie Mac Insured Multifamily Loans for Conventional, Seniors, and Targeted Affordable Housing Developments 

Today, many multifamily investors are finding that by reducing their resource use, they can also save money, and, with Freddie Mac's Green Advantage program also offering significant financial incentives, it's never been a better time to go green. Freddie Mac's main Green Advantage incentive programs include Green Up and Green Up Plus, each of which offers increased LTV allowances and reduced DSCR requirements to properties that can demonstrate a 30% reduction in water/sewer and energy consumption (at least 15% of which must come from energy consumption).

In order to demonstrate that reduction, Freddie Mac borrowers will need to get a Green Assessment, the cost of which (up to $3,500) is reimbursed by Freddie Mac at loan closing. However, properties that have gotten other kinds of green certifications, including certain ENERGY STAR, Green Globes, and EarthCraft certifications, and have at least 20% affordable units are also eligible for the Green Advantage program. 

Keep reading below to learn more, or click here to download our easy-to-understand Freddie Mac Green Advantage Loan term sheet.

Sample Freddie Mac Terms For Green Advantage Financing

Minimum Projected Consumption Reduction: 30% of energy or water/sewer consumption based on Green Assessment or Green Assessment Plus, with a minimum of 15% from energy

Maximum LTV/Minimum DSCR:  

  • As Is: -0.05x DSCR reduction, subject to 1.20x or product limit. +5% LTV subject to greater of 85% or project limit.

  • As-Improved: "Must meet policy compliant DSCR/LTV." Amounts based on as-improved NOI/appraised value.

Timeline:  Borrowers have 2 years to complete improvements

Escrow: Funds for energy/water efficiency work will be escrowed at 125% of cost and released as work is completed

Benchmarking Data Requirement: Green Advantage loans require borrowers to hire a third-party data collection consultant, before loan origination, to collect, input and monitor actual energy and water usage through the loan’s term.

Other Eligible Green Certifications: 

If your property has at least 20% affordable units and is already certified under one off the below programs, it may also qualify for discounted loan pricing: 

  • EarthCraft, Greater Atlanta Home Builders Association & South Face

  • ENERGY STAR® for Multifamily, EPA

  • ENERGY STAR® for Qualified Multifamily High-Rise, EPA

  • Green Communities, Enterprise Community Partners

  • Green Globes, Green Building Initiative

  • GreenPoint Rated, Build It Green

  • LEED, US Green Building Council

  • National Green Building Standard (NGBS), Home Innovation Research Labs

Green Rebate:  Even without using any of the Green Advantage options mentioned above, eligible borrowers (those with properties with 20+ units) can still get a $5000 green rebate from Freddie Mac for getting an EPA ENERGY STAR Score®

C-PACE:  Commercial PACE financing may be available upon request 


  • Allows for increased LTVs and decreased DSCR requirements

  • Eligible mixed-use properties supported


  • Green Assessment required

  • Property energy and water usage need to be recorded in an EPA Portfolio Manager for the calendar years up to the fourth year of the loan