Fannie Mae updates requirements for green building financing

Fannie Mae updates requirements for green building financing

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Fannie Mae has made revisions to its popular green financing program to improve the processing of green mortgage loans.  

The agency has issued a modified standard Guidance Form 4099 and 4099.H that updates the scope and format of the High Performance Building (HPB) Report, a requirement of Fannie Mae’s Green Rewards Program. Fannie Mae also authorized lenders to now be able to review green building certifications, reports

The changes are effective immediately and aim to improve the speed and quality of its green programs.

In its communication, Fannie Mae announced that it now requires:

  • All HPB Reports ordered on or after May 22, 2017, use the new Form 4099 and 4099H. For reports ordered prior to this date, using the new guidance is at the lender’s discretion.
  • The consultant performing the HPB assessment must submit both the HPB Report and the 4099.H to the lender.
  • The Lender must review all HPB reports – both using the new 4099 and prior version – prior to delivery to Fannie Mae.

What’s changed?

  • Review will be delegated
    The most significant change is that Fannie Mae is now providing lenders the opportunity to review green certifications, as well as HPB reports. Fannie Mae was already delegating all review but made an exception for HPB reports, which were reviewed in-house by Fannie Mae. Now, lenders having reviewed eight or more HPB reports will have the authority to approve HPB reports prepared by “pre-qualified” consultants. Fannie Mae will add HPB consultants to the pre-qualified list once they have submitted five HPB Reports to any lender scored as a “1″ (which means no material revisions were required following review). 
  • Revised HPB scope
    The scope has been revised to streamline the HPB assessment. The energy and water calculations using energy modeling software requirement of the HPB assessment used to determine potential energy and water savings are now optional. Site visit scope and sampling requirements have also been modified. 

The site visit must now include a sampling of water fixture flow rates. Also, it may be more difficult to hit water savings targets because measure adoption rates will be incorporated into several common water measures in the new Form 4099.H; for example, the implementation of showerheads will come with the assumption that a certain percentage of units may not permanently adopt the measure.

The report timeline will be compressed: Fannie Mae expects that all approved HPB consultants agree to deliver HPB reports within two weeks from the collection of all data, including the site visit and all required utility data.

  • Revisions to green building certification pricing break
    Loans made through the Green Building Certification Pricing Break no longer receive the same price break as loans made through the Green Rewards Program. Delegated brokers can issue a five basis point reduction on assets with a green certification. Additional price breaks might be possible but require a direct discussion with Fannie Mae to determine if more favorable financing is available.


Topics: Architectural Firms, Associations / Organizations, Building Owners and Managers, Construction Firms, Consulting - Green & Sustainable Strategies and Solutions, Engineering Firms, Financial Institutions, Great Commercial Buildings

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