1. Green Homes Partnership: Energy-Efficient & Affordable Residential Development NCSHA 2015 Annual Conference David Clifton, Assistant Director Multifamily Housing & Community Facilities

2. An Unexpected Development: Single-Family Construction Financing Partnership with a private developer has opened a new frontier for us in Washington State Partnership with a private developer has opened a new frontier for us in Washington State Outgrowth of Sustainable Energy Program, rather than single- family mortgage program Outgrowth of Sustainable Energy Program, rather than single- family mortgage program Goal: To increase awareness and value of energy-efficiency in residential construction

3. Origin 2009 –state legislature empowered Commission to finance energy projects 2009 –state legislature empowered Commission to finance energy projects We were asked to create a program that: We were asked to create a program that: Finances energy efficiency & renewable energy Finances energy efficiency & renewable energy Does not use state funds or credit Does not use state funds or credit Created Sustainable Energy Trust (SET) Created Sustainable Energy Trust (SET) “Green bank” “Green bank” Invested $6 million PIF Funds so far Invested $6 million PIF Funds so far

4. Why Energy? Heating, cooling, lighting, cooking & washing can add 100s of dollars to housing costs Heating, cooling, lighting, cooking & washing can add 100s of dollars to housing costs Owners of energy-efficient homes are 33% less likely to default on their mortgages* Owners of energy-efficient homes are 33% less likely to default on their mortgages* Lenders don’t consider energy/utility costs when approving potential buyers Lenders don’t consider energy/utility costs when approving potential buyers Energy-efficient homes are considered luxury products—but greatly benefit those with lower incomes Energy-efficient homes are considered luxury products—but greatly benefit those with lower incomes *According to study conducted by University of North Carolina at Chapel hill

5. Enter: Green Canopy Homes Seattle-based, for-profit developer dedicated to “inspiring resource efficiency in residential markets” Seattle-based, for-profit developer dedicated to “inspiring resource efficiency in residential markets” Sustainable Energy Trust a good match: lower-cost homes could pencil out Sustainable Energy Trust a good match: lower-cost homes could pencil out Started with buy-fix-resell model—GCH could rehab homes to use 30-50% less energy Started with buy-fix-resell model—GCH could rehab homes to use 30-50% less energy Partnership now focused on new construction Partnership now focused on new construction Four successful projects – 16 homes (8 more in works) Four successful projects – 16 homes (8 more in works)

6. 3 originally dilapidated homes in West Seattle 3 originally dilapidated homes in West Seattle Green Canopy Homes borrowed $720,000 from SET at 2% interest (repaid when homes sold) Green Canopy Homes borrowed $720,000 from SET at 2% interest (repaid when homes sold) GCH bought and transformed all 3 w/$720K loan from SET GCH bought and transformed all 3 w/$720K loan from SET The Triplets Added 50% more living space Added 50% more living space Used 25-50% less energy Used 25-50% less energy 3-bedroom, 2 bath homes 3-bedroom, 2 bath homes

7. Earth 6 Most recent project—on market in June 2015 Brand-new construction in existing neighborhood 6 townhome-style homes 3 stories, 3 bedrooms & 3 baths Typical Seattle house uses 28,000 kilowatt hours of power each year Each of these uses just 12,000

8. Next Steps: Evolution of the Partnership Using our success as a catalyst to bring in other investors Expanding outside Seattle to other parts of state Bringing in Community Land Trusts and other nonprofits Awareness: Bring in contractors on similar projects Educating homebuyers & real estate agents on the value of energy-efficient homes

9. The Birch Fund Investor fund established by Green Canopy Homes Goal: Inspire developers to do energy-efficient construction at a lower cost to benefit those with lower incomes Loans directly to developers (function similar to Sustainable Energy Trust) Hope to grow fund to $20M from present $7M Commission’s role: Invested $500K Guarantees losses to reduce risk to investors

10. Aligning Energy Across WSHFC Divisions Started as separate distinct program—now aligning with other work across Commission Multifamily—Encouraging green building Compliance—Utility allowances, data-sharing partnership with city of Seattle Utility Discount Program

11. New program introduced June 2015 Allows energy-efficient improvements to be financed into the loan at the time of purchase OR, can purchase a highly energy-efficient new home ¼ interest rate reduction, plus downpayment asssistance Aligning Energy across WSHFC Divisions: EnergySpark Home Loan

12. Contact David Cliften, Assistant Director Multifamily Housing & Community Facilities David.Clifton@wshfc.org 206-287-4407