An eligible green financing program may recognize documented savings under its underwriting rules. Confirm the required assessment, qualifying work and permitted income adjustments with the lender.
Mechanics of the underwriting uplift
Step 1, energy audit. An approved energy auditor performs an ASHRAE-equivalent audit of the property and identifies energy and water retrofits (LED lighting, low-flow fixtures, HVAC upgrades, building envelope improvements). The audit projects annualized cost savings from the retrofit scope.
Step 2, NOI uplift. The agency allows a portion of the projected savings to be added to the property's underwritten NOI for sizing purposes. The exact percentage of projected savings allowed varies by program and execution, but typical NOI uplift is $50 to $200 per unit per year on a multifamily property.
Step 3, sizing benefit. The uplifted NOI flows through to all sizing tests (DSCR, debt yield), allowing the loan to size larger at the same coverage thresholds. Typical proceeds benefit: 5% to 15% larger loan, depending on which sizing test binds.
Step 5, retrofit commitment. The sponsor commits to completing the audited retrofit scope within a defined timeline (typically 12 months from closing) and reports on completion. Failure to complete can trigger a pricing reset to standard agency.
Sources
- Delegated Underwriting and Servicing (DUS) program disclosures · Fannie Mae · current
- Optigo lending program disclosures · Freddie Mac Multifamily · current