WASHINGTON, DC—Fannie Mae is making a number of tweaks to various programs to better promote and publicize its green MBS, a type of security that the GSE has been quietly marketing for the last year and a half. Yesterday we looked at Fannie's collaboration with US Environmental Protection Agency to develop an ENERGY STAR score for existing multifamily properties.

Other moves the GSE is making includes forming partnerships with private sector lenders and one New York state agency to support a pilot project called M-PIRE, which will, when it gets off the ground, allow for potential energy savings to be underwritten in the loan, thus permitting an increase in the loan amount which funds the improvements in the property; and changing one program to allow a borrower to take cash out of a green loan after equity has accumulated.

There are two ways a security is green-tagged by Fannie Mae, Donna Varner, manager of the Multifamily Green Initiative at Fannie Mae, tells GlobeSt.com. It can come out of one of its financing products, such as the Multifamily Green Preservation Plus program or M-PIRE, which is still in launch stage. Or the security can be based on a building that has a green certification from one of eight organizations.

It is the Multifamily Green Preservation Plus program that is changing a key requirement – that is, allowing the borrower to take cash out. "We are introducing that change to get more volume around the program," Varner says. The M-PIRE pilot launched in fall of 2013 and Fannie Mae has just selected three DUS lenders to get the program out of the starting gate-Wells Fargo, Greystone and Beech Street. Fannie Mae has also partnered with the New York City Energy Efficiency Corp. One interesting element to this program is its underwriting criteria, which allows for potential energy savings to be included in the loan. "That allows an increase in the loan amount, which funds the improvements in the property," Varner says. "Hopefully we will soon close our first M-PIRE loan."

Fannie Mae is currently investigating a national product based on the M-PIRE model, she adds. "We hope to know one way or another by the end of 2014."