Fannie Mae Green Financing Programs

Financing for Green and Energy Efficient Apartment Buildings and Multifamily Properties insured by Fannie Mae

Going green and saving money are not mutually exclusive, especially if Fannie Mae has something to say about it. For investors and developers looking to make more environmentally friendly choices, Fannie Mae offers 3 different green financing options. Each of the three Green Financing programs is designed to provide a 0.10% interest rate discount to Fannie Mae multifamily borrowers, which can result in tens (or hundreds) of thousands in savings over the life of a loan.

The three programs are broken down into Fannie Mae Green Rewards, Fannie Mae Green Building Certification Pricing Break, and the Fannie Mae Green Preservation Plus. The Green Rewards program allows borrowers to take out 5% more in loan proceeds by factoring in the water and power savings that they'll experience in the future, so long as borrowers are able to demonstrate that the property will save at least 20% on their energy and/or water costs. The Green Preservation Plus program is focused on helping developers of multifamily affordable housing (MAH) properties by increasing LTV allowances up to 85% and allowing for lower DSCR ratios if borrowers can prove that green upgrades were made that equal at least 5% of the original loan amount. Lastly, the Green Building Certification Pricing Break is designed to give a 0.10% interest rate discount for Fannie Mae acquisition or refinance loans on buildings that have an up-to-date Green Building Certification.

Sample Fannie Mae Terms For Green Financing 2021

Size: Varies

Terms: Up to 30 years


  • Green Rewards: Up to 30 years (interest-only options also available)
  • Green Preservation Plus: Up to 40 years, 30 years for balloon loans

Interest Rates:

  • Green Rewards and Green Building Certification: Fixed and adjustable-rate loans available
  • Green Preservation Plus: Fixed-rate only


  • Green Rewards and Green Building: Up to 80%
  • Green Preservation Plus: Up to 85%


  • Green Rewards: 1.25x for market-rate properties, 1.20x for affordable properties
  • Green Building Certification Pricing Break: 1.25x for market-rate properties, 1.20x for affordable properties
  • Green Preservation Plus: 1.15x

Recourse: Most loans are non-recourse with standard “bad boy” carve-outs

Prepayment Penalty: Yield maintenance and other declining prepayment options available

Occupancy Requirements: 85% physical occupancy 90 days before closing, 70% economic occupancy

Commercial Space Limits: Commercial space must not exceed 35% of the net rentable area and 20% of the project's effective gross income

Eligible Properties:

  • Market-rate, affordable, senior, military housing, and cooperative properties all eligible
  • Borrowers need to agree to target a minimum 25% reduction in energy or water use


  • 0.10% interest rate discount provided
  • Larger loan sizes permitted (for Green Rewards and Green Preservation Plus)
  • Competitive interest rates
  • Most loans are non-recourse
  • 30- 180 day rate locks available (early/extended rate locks are also available)


  • Requires third-party reports including an appraisal, property condition assessment, Phase I Environmental Assessment, and a High-Performance Building (HPB) report (for Fannie Mae Green Rewards and Green Preservation Plus)
  • $12,500 application deposit required
  • $3,000 non-refundable processing fee required
  • 1% loan origination fee required
  • 2% good faith deposit due at rate lock (refundable at closing)
  • Replacement reserves of $250/unit/year required
  • Subordinate financing not allowed without written approval