WASHINGTON, DC—Fannie Mae has expanded its Green Preservation Plus program to include the acquisition of affordable, energy-efficient multifamily housing projects. Previously this program only supported refinancing, Chrissa Pagitsas, director of Fannie Mae's Multifamily Green Initiative tells GlobeSt.com.

Changes to the program also allow cash outs, she says. "Owners can use the proceeds to make property improvements or fund additional costs such as developer fees."

Finally, the name of the program has also changed—it was formerly known as Green Refinance Plus.

Briefly, Green Preservation Plus provides funds to improve the energy and water efficiency of multifamily properties with an affordable housing component. The program was quietly launched about a year-and-a-half ago; more recently the GSE has been stepping up its publicity about it.

Under the new changes borrowers can receive 5% in their mortgage amount to invest in energy-efficient improvements, Pagitsas says.

"Frequently we hear from property owners that they would like to make these investments, which will increase their cash flow, but there isn't enough room in the standard debt structure to fund them," she says. Now a, for example, $10 million loan could have an additional $500,000 incorporated into it. The same lender provides the funds under the same underwriting criteria in the same loan, Pagitsas says. The borrower has just one payment on that $10.5 million loan.

Green Preservation Plus is part of a Fannie Mae and HUD/Federal Housing Administration Risk-Sharing Agreement program. Since the inception of the Fannie Mae Multifamily Green Initiative, the GSE has issued over $150 million in Green MBS, including Green Preservation Plus loans.

In March of this year Fannie Mae introduced other changes to this program, including an agreement with US Environmental Protection Agency to develop an ENERGY STAR score for existing multifamily properties.