Multifamily housing has lagged in terms of providing green, sustainable housing solutions. Leaders like Fannie Mae are identifying and creating opportunities to advance in those areas by providing funding. Leaders at Fannie Mae admit they don't have all the expertise necessary to drive change, but are inviting in others who do.
Two weeks ago, the Mortgage Bankers Association held its annual CREF/Multifamily Housing Convention & Expo in San Diego. There, Jeffery Hayward—who heads up Fannie Mae’s multifamily mortgage business—spoke to Multi-Housing News. The following conversation details the GSE’s recent and upcoming initiatives, as well as impactful trends and important milestones in 2018.
What’s new at Fannie Mae?
Hayward: We were already on the trajectory to go green, and (Fannie Mae’s Green Financing business) exploded last year, from $3 billion to $27 billion. I think the reason is that owners are seeing that the savings are really there. Here’s the number I focus on: $127 per year in energy savings, which is about $10 less each month for tenants. Now, I expect our green lending program to be a mainstay of what we do.
Fannie Mae is also celebrating three important milestones this year: 80-50-30. The first one is Fannie Mae’s 80th anniversary. It’s been 50 years since the signing of the Fair Housing Act. This year also marks the 30th anniversary of our Delegated Underwriting and Servicing (DUS) lenders program, which is the longest running risk-sharing model in American business.
Last year, we introduced Healthy Housing Rewards, and it has two basic tenets. First, if you have a building that is designed and built for improving the health of your residents—say, with better air quality or more space for movement—we will give you a discounted price. The second part relates to resident services: If you offer after-school programs, tax preparation (assistance) or transportation for tenants to see their doctors, we will give you a discounted price. I believe that could be the next area for explosive growth, where we get owners of affordable apartments to start implementing (these practices) in their buildings.
We’re not just focused on financing buildings for the owner’s sake. We’re trying to reach through and find out how (these changes) impact the tenant and how can we ensure that their living circumstances get better.
This year, we went back into the low-income housing tax credit (LIHTC) business and just announced our first fund of $100 million (Raymond James Affordable Housing Fund 11 LLC). We’re going to start in hurricane-affected areas. We picked (the region) because we wanted to go to the places that needed us the most. If you watched what happened in Houston, you couldn’t help but feel that you had to do something about it. Rather than sit and offer commentary, we knew we could try to help. Our fund is aimed at Houston and underserved markets.
Our (management) partner is Raymond James (Tax Credit Funds, Inc.), and together, we’re going to build units that are disaster resistant. By that I mean, we’ll be putting mechanicals on the roof instead of the basement in case of flooding. Another feature we’ll include is backup generators. So, if you’re in a flood zone, you’ll at least be able to have power. We’re thinking about how people can survive a disaster, so that we never have to go through (a situation like Hurricane Harvey’s aftermath) again.Read More