Freddie Mac has announced a deal that will fund housing loans made through its Green Advantage program, which aims to lower utility costs and address housing affordability issues.
The GSE’s program obligates borrowers to cut down energy or water consumption by 30%. Freddie Mac gives borrowers two years to make the improvements and tracks progress in an ENERGY STAR database.
So far, the program has backed 1,600 properties, which are expected to save 4.7 billion gallons of water and almost 1.8 billion kBtu in energy per year. Nearly 86% of the units financed are affordable to tenants with incomes equal to or less than the area median income (AMI). On average, Freddie Mac projected that tenants would save $138 per year through reduced utility bills.
“In a way, every K-Deal since 2016 has had some element of green because we have integrated Green Advantage loans throughout our platform since the creation of the program,” said Robert Koontz, the head of capital markets at Freddie Mac. “KG-Deal goes a step further, offering environmentally and socially conscious investors the opportunity to invest in bonds that support that mission. Ultimately, these investors are helping to reduce carbon emissions and water usage in thousands of older multifamily units across the country.”