1 Green Retrofit Program for Multifamily Housing HUDs Office of Affordable Housing Preservation (OAHP) IPED June, 2009

2 GRP Introduction GRP Introduction The Green Retrofit Program for Multifamily Housing (GRP) was authorized by the American Recovery and Reinvestment Act of 2009, whose objectives are to: Boost the economy Boost the economy Create jobs Create jobs Restore economic growth Restore economic growth Strengthen Americas middle class Strengthen Americas middle class.

3 The American Recovery and Reinvestment Act of 2009 $13.6 b at HUD: $13.6 b at HUD: Public Housing - $4 billion Public Housing - $4 billion Healthy Homes/Lead Abatement - $100 million Healthy Homes/Lead Abatement - $100 million Homelessness/Rapid re-Housing - $1.5 billion Homelessness/Rapid re-Housing - $1.5 billion Assisted Housing Green Retrofits - $250 million Assisted Housing Green Retrofits - $250 million Native American Block Grants - $510 million Native American Block Grants - $510 million Tax Credit Assistance Program - $2.25 billion Tax Credit Assistance Program - $2.25 billion CDBG - $1 billion CDBG - $1 billion Neighborhood Stabilization Program - $2 billion Neighborhood Stabilization Program - $2 billion $5 b at DOE - Weatherization Assistance Program $5 b at DOE - Weatherization Assistance Program

4 GRP Introduction GRP Introduction Program guidance is provided in Housing Notice H-09-02, published May 13, The Notice, all forms, and application are available at : … $250,000,000 shall be for grants or loans for energy retrofit and green investments … … $250,000,000 shall be for grants or loans for energy retrofit and green investments ….

5 HUD Background: HUD Background: The Mark-to-Market (M2M) Program The Mark-to-Market (M2M) Program Created by Congress for preservation and savings Created by Congress for preservation and savings Over 3,000 properties to date, 1,700 full restructures Over 3,000 properties to date, 1,700 full restructures The Green Initiative The Green Initiative Introduced in 2007 to incentivize M2M owners to rehab properties in the most sustainable way Introduced in 2007 to incentivize M2M owners to rehab properties in the most sustainable way Borrows practices from M2M, Energy Task Force, and Office of Healthy Homes Borrows practices from M2M, Energy Task Force, and Office of Healthy Homes 75 properties participating in the pilot 75 properties participating in the pilot Set the stage for the Green Retrofit Program

6 GRP Introduction GRP Introduction To be administered by HUDs OAHP To be administered by HUDs OAHP OAHP administered M2M and the Green Initiative OAHP administered M2M and the Green Initiative 22 LEED APs 22 LEED APs Will use contractor/PAE structure Will use contractor/PAE structure Funding is available for Section 8, 202, and 811 properties with project-based assistance Funding is available for Section 8, 202, and 811 properties with project-based assistance Minimum project size, and limits by property type, geography, and owner entity Minimum project size, and limits by property type, geography, and owner entity

7 GRP Introduction GRP Introduction Maximum improvements of $15,000/unit expected to average $10,000/unit Maximum improvements of $15,000/unit expected to average $10,000/unit Cash-flow loans, and grants in some cases Cash-flow loans, and grants in some cases Green and energy retrofits only (improvements that conserve energy, water, improve indoor air quality, and/or benefit the environment) Green and energy retrofits only (improvements that conserve energy, water, improve indoor air quality, and/or benefit the environment) No cost to most property owners (except in limited cases) No cost to most property owners (except in limited cases) Applications accepted beginning June 15, 2009 Applications accepted beginning June 15, 2009

8 GRP Benefits GRP Benefits Benefits to Residents: Tenant meeting to gather resident input to property needs and opportunities Tenant meeting to gather resident input to property needs and opportunities May replace old, inefficient appliances and equipment with more energy-efficient models May replace old, inefficient appliances and equipment with more energy-efficient models Increase thermal comfort Increase thermal comfort May reduce dust, mold, and pests May reduce dust, mold, and pests May provide healthier homes May provide healthier homes Preserves affordable housing for long term Preserves affordable housing for long term

9 GRP Benefits GRP Benefits Benefits to HUD and Taxpayers: Extended affordability for at least 15 years Extended affordability for at least 15 years Reduced utility costs (from HUDs $5b costs) Reduced utility costs (from HUDs $5b costs) Improved indoor air quality for residents Improved indoor air quality for residents Trained green property management staff Trained green property management staff More sustainable operations and maintenance More sustainable operations and maintenance Use of Integrated Pest Management Use of Integrated Pest Management Unprecedented collaboration between federal agencies (HUD, DOE, DOT, EPA, CDC, etc) around housing and environmental issues Unprecedented collaboration between federal agencies (HUD, DOE, DOT, EPA, CDC, etc) around housing and environmental issues

10 GRP Benefits GRP Benefits Benefits to Property Owners: Improved property using low-cost capital Improved property using low-cost capital Performance-based financial incentives Performance-based financial incentives Access to green building materials, products and technologies Access to green building materials, products and technologies May replace old, inefficient appliances and equipment with more energy-efficient models May replace old, inefficient appliances and equipment with more energy-efficient models Contributes to energy and water savings, and broader environment al benefits Contributes to energy and water savings, and broader environment al benefits Share in future utility savings Share in future utility savings

11 GRP Owner Incentives GRP Owner Incentives Pre-Development Incentive – 1% of Green Retrofits up to $10,000, paid at closingPre-Development Incentive – 1% of Green Retrofits up to $10,000, paid at closing Efficiency Incentive – 3% of Green Retrofits up to $30,000, paid upon satisfactory and timely rehabEfficiency Incentive – 3% of Green Retrofits up to $30,000, paid upon satisfactory and timely rehab Incentive Performance Fee – 3% of EGI, paid annually from Surplus Cash upon meeting pre-conditionsIncentive Performance Fee – 3% of EGI, paid annually from Surplus Cash upon meeting pre-conditions Targeted Job Creation Incentive (optional) – 10% of expenditures up to $25,000, for contracting with Eligible Residents or Concerns pursuant to Section 3Targeted Job Creation Incentive (optional) – 10% of expenditures up to $25,000, for contracting with Eligible Residents or Concerns pursuant to Section 3

12 GRP Process: 1.Tenant Meeting 2.Physical Condition Assessment 3.Contractor/PAEs Plan Development 4.Owner Secures Bids / Estimates 5.Discussions with PAE and Owner 6.Green Operations & Maintenance Plan 7.Final Feasibility Assessment

13 GRP Process: 8.HUD Approval of Retrofit Plan 9.Green Retrofit Plan Commitment 10.Closing of Loan/Grant, Funds Escrowed 11.Start Green Retrofits Timely 12.All Work Subject to Davis Bacon 13.Recovery Act Reporting 14.Completion of Green Retrofits 15.Final Adjustments and Close-Out

14 GRP Application: Beginning June 15, 2009 Beginning June 15, 2009 Applications must be complete, or will be rejected. Complete application Includes: Applications must be complete, or will be rejected. Complete application Includes: 14 items of Required Information14 items of Required Information 15 Owner Certifications15 Owner Certifications 8 Owner Commitments8 Owner Commitments Initial Feasibility Assessment, showing Pass**Initial Feasibility Assessment, showing Pass** hud.gov/recovery has all of the forms hud.gov/recovery has all of the forms All accepted and waitlist applications will be posted at hud.gov/recovery All accepted and waitlist applications will be posted at hud.gov/recovery

15 For More Information : HUD Recovery Website: HUD Recovery Website: OAHP Resource Desk Q&A: OAHP Resource Desk Q&A: (Free Registration) (Free Registration) Contact for Green Initiative Information: Contact for Green Initiative Information: