1. Energy Efficiency Recent Updates and Highlights Prepared by Eileen Hearty, Project Manager Office of Asset Management – Denver Multifamily Hub

2. 2 sustainability greener energy Long-term sustainability requires continued partnership between HUD and the sponsors and owners of federally supported affordable housing. We encourage continued efforts to make these projects greener, healthier, and more energy efficient. Through our collective efforts we can benefit America’s low-income households, improve communities, and have a greater impact with our federal investment. http://www.huduser.org/Publications/pdf/EnhancingEnergyEff_GreenBuildingV2.pdf

3. MF Energy Efficiency Initiatives MF Energy Efficiency Initiatives - Implemented 3

4. MF Energy Efficiency Initiatives – MF Energy Efficiency Initiatives – Planned 4

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6. 6 As part of President Obama's Climate Action Plan, in 2013 HUD and DOE extended the Better Buildings Challenge to include multifamily housing. The BBC asks building owners to commit to a 20% portfolio-wide energy reduction over 10 years. 59 multifamily residential partners (+ 29 housing authority partners) have joined the Challenge.

7. 7 Current MF BBC Incentives energy Management Fee Incentive: Access to Add-on Fees for eligible energy and water efficiency activities. energy Reserve for Replacement Incentive: Expedited approval for energy and water efficiency capital improvements. energy Mark to Market Incentive: Incentive Performance Fee increase for meeting specific energy and water efficiency requirements. energyenerg PRAC Shared Savings Incentive: Allow 202/811 PRAC properties to include energy savings associated with energy improvements as an eligible expense in the property budget.

8. MF BBC Incentives to come energy Increased distributions: Up to 100 percent for non- profit Section 8 owners, based upon properties meeting annual energy reduction targets. energy On-Bill Financing and Repayment Incentive: Memo on participation in on-bill repayment program in California to support energy efficiency improvements. 8

9. More about BBC www4.eere.energy.gov Several multifamily owners have posted showcase projects (case studies) on the BBC website. All owners are expected to post their showcase projects up this year. May 27-29 will be the annual Summit of the BBC partners in DC. Gatherings of BBC partners for later this year. MFBBC@hud.gov MFBBC@hud.gov Send questions to MFBBC@hud.gov MFBBC@hud.gov 9

10. MF PACE – Update January 2015 Governor Brown and Secretary Castro announced a California Multifamily PACE Pilot in partnership with the MacArthur Foundation. The Pilot enables commercial PACE financing for certain MF properties, including specific properties within HUD, the California Department of Housing and Community Development, and the California Housing Finance Agency’s portfolios. Policy memo to explain underwriting of PACE assessments for properties with FHA insured mortgages and/or HUD rental assistance. portal.hud.gov/hudportal/documents/huddoc?id=MF_PACE_CA_Memo.pdf 10

11. Upcoming Publications MAP Guide energy MAP Guide - Updating the methodology by which energy savings are underwritten for FHA insured loans. Draft available and public comments can be submitted until 4/30/15. energy energy Proposed: increased per unit improvements limit; use estimated energy efficiency savings in underwriting; minimum standard for energy efficiency for investments; requirements for use of CNA E-tool for FHA loan underwriting. 11

12. Upcoming Publications CNA-e Tool energyenergy CNA-e Tool - A Notice on required use of a new electronic Capital Needs Assessment, which includes a required energy audit and energy use benchmarking. Applications for insured mortgages and 10-year updates must include calculation of annual utility consumption. Allows evaluation of the potential for achieving cost savings and reduced carbon emissions. 12

13. Upcoming Publications Utility Allowance Analysis Utility Allowance Analysis - Housing Notice on utility analysis methodology. Multifamily Housing staff have analyzed the current practices for determining utility allowances and have developed recommendations for improving the analysis methodology in order to more accurately determine allowances and to minimize costs to HUD. RAD energy RAD – Updated Notice later this month. Updates the methodology by which energy savings are underwritten for RAD deals with new PBRA contracts. 13

14. Upcoming Publications Utility Use Data Collection/Benchmarking - energy Energy Utility Use Data Collection/Benchmarking - Collecting energy use data from existing assisted and insured properties (properties not covered by the CNA e-tool guidance) and also setting a minimum standard for energy efficiency for existing properties. This connects to the newly available Energy Star Score for Multifamily from the EPA’s Portfolio Manager. 14

15. Looking Forward Minimum Energy Efficiency Standards Minimum Energy Efficiency Standards – Federal Register Notices: Adoption of Energy Efficiency Standards for New Construction of HUD- and USDA- Assisted Housing (2009 energy standards, affects 9 states for MF) and Adoption of Energy Efficiency Standards for New Construction of HUD- and USDA- Assisted Housing and Solicitation of Comment (2013 standards, affects 41 states for MF). Pay-for-Success Pay-for-Success FY16 Budget Proposal for 20,000 PBRA units in energy performance contracting. 15