IT HAS GOTTEN A LITTLE EASIER FOR DEVELOPERS and builders to borrow money for green building projects thanks to a recent launch by Second Angel Bancorp (SAB) of a lending program aimed at such projects.
“Our belief is that investors and lenders like us will help drive green building,” says Richard Zahm, a principal at the Fair Oaks, Calif.–based lender. These types of loans make sense, Zahm says, because “our risk factors will be lower because the projects will pay for themselves over time.”
Under the program, SAB will provide money and incentives to builders who are pursuing energy-efficient or green multifamily projects. The lender will give priority to projects that adhere to U.S. Green Building Council's Leadership in Energy Efficient Designs or buildings that are constructed with environmentally friendly or renewable materials. They will also single out homes that include such features as water collection, graywater systems, motion-sensing lights, and high-efficiency appliances, among many other earth-friendly features.
For projects that include these features, SAB will offer credit at lower costs and a 1/8 percent to ¼ percent discount on loans. These discounts, the company says, will likely result in significant savings over time for the borrower.
The typical loan so far is $1.5 million, Zahm says. However, the bank partners with other lending institutions, which lend or invest in a portion of larger transactions that may go up to $20 million, the company explains. The program covers loans on the West Coast, but Zahm says the company will be covering more Eastern areas soon.