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Fannie Mae celebrates $100B Multifamily Green MBS Milestone

Nearly ten years since it issued its first Multifamily Green Bond, Fannie Mae has now completed the issuance of $100 billion of green multifamily mortgage-backed securities to support the sustainability and greening of the US housing market.

“Fannie Mae’s Multifamily green financing has helped preserve and improve existing housing stock, supporting our efforts to bolster the nation’s supply of housing affordable to low- and moderate-income households,” said Michele Evans, Executive Vice President, Multifamily, Fannie Mae.

Fannie Mae’s green bonds specifically encourage the building, heating, cooling, powering and water consumption of multifamily properties in more efficient ways to improve environmental sustainability. According to the mortgage giant, Green securities have helped lower projected utility costs for tenants to keep rental housing affordable. They accredit these improvements as enhancements to its multifamily guaranty book of business, which in turn can help reduce risk for Fannie Mae.

Fannie Mae launched the Multifamily Green Initiative in 2010, which became the company’s Multifamily Green Financing Business after the issuance of its first Multifamily Green Bond in 2012. In April 2020, on the 50th anniversary of Earth Day, Fannie Mae issued its first Single-Family Green MBS.

As one of the largest green bond issuers in the world, Fannie Mae issued nearly $88 billion of Multifamily Green MBS from 2012 through year-end 2020, and has resecuritized approximately $11 billion Multifamily Green MBS into Real Estate Mortgage Investment Conduits (REMICs) as part of its Guaranteed Multifamily Structures (Fannie Mae GeMS) program.

The mortgage servicer has also repeatedly made conscious efforts towards ESG — environmental, social and governance — endeavors, three categories of non-financial disclosures that consumers and investors are increasingly interested in.

For its efforts, the Environmental Protection Agency and the U.S. Department of Energy awarded Fannie Mae the 2021 ENERGY STAR Partner of the Year – Sustained Excellence Award, the first time this recognition included its Single-Family business. 

“Socially responsible investors are attracted to our Green MBS due to the published frameworks aligned to global standards and second-party ratings of those frameworks, as well as the transparency of our program,” Evans said.

While Fannie Mae celebrates its $100 billion multifamily bond milestone, the GSE said there is much more work to be done to sustainably grow the housing market.

Evans noted Fannie Mae is actively working to boost the consistency and quality of the data available in the green bond space – from whole building utility data to source energy composition to measurement and verification of energy and water improvements.

“We are working with our network of lenders and our energy auditor partners to provide the market the clearest picture of building performance and greenhouse gas emissions (GHG) avoided,” Evans said.

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