Eastern Union Funding has arranged a $68 million loan to refinance a large apartment community in the Washington DC metro region. The deal is unique as it taps into Fannie Mae’s Green Financing program to fund energy- and water-saving improvements at the property.
“This refinancing not only enables the owner to make upgrades that will lower the annual utility and maintenance costs, but they are also the kinds of sustainable improvements that tenants notice and appreciate,” said Eastern Union Managing Director Jake Handelsman, who arranged the financing in partnership with Arbor Realty Trust Vice President Stephen York.
“The improvements have a projected annual utility savings of $245,000, and the sponsor received a lower fixed interest rate, resulting in additional annual mortgage savings,” Handelsman added.
While the multifamily investment market has tempered somewhat in the DC area, Eastern Union Funding continues to close many acquisition and refinancing deals in the area. Handelsman noted there are additional opportunities for owners to similarly add value to their properties through energy savings.
Fannie Mae offers three programs for multifamily owners: Green Rewards, ideal for property owners investing in energy- and water-cost reducing property improvements at existing properties; Green Building Certification Pricing Break, which offers a lower interest rate for properties with Green building certifications; and Green Preservation Plus, targeted toward affordable property owners seeking to update equipment and reduce costs. All Fannie Mae Green products offer pricing incentives, according to Fannie Mae.