HUD rolls out green initiative for some properties

WASHINGTON – July 23, 2007 – The U.S. Department of Housing and Urban Development (HUD) rolled out a nationwide pilot program to encourage owners of multifamily Section 8 properties to rehabilitate and operate their buildings using “green building” principles. HUD includes its Health Homes Initiative in the program and hopes to encourage sustainability, energy efficiency, the use of recycled materials and an improvement for indoor air quality. Green building practices are designed to lower utility costs, thereby benefiting taxpayers, property owners and a building’s residents.

The Green Initiative will be implemented on properties within HUD’s Section 8 portfolio, specifically properties in the Mark to Market (M2M) program, administered by HUD’s Office of Affordable Housing Preservation (OAHP). Participation in the initiative will be voluntary for eligible-property owners.

HUD’s Green Initiative, through the M2M program, can be implemented within existing statutes, regulations and budgets. M2M allows HUD to test the impact of green and Healthy Housing principles in the existing HUD-subsidized multifamily inventory by providing modest incentives to owners and purchasers to perform needed rehab and maintenance using green alternatives, and to collect ongoing data to validate impacts on utility consumption and indoor air quality.

Currently, under M2M, HUD finances 80 percent of most rehab items, and 97 percent of certain significant additions to the property. Under this initiative, HUD will designate substantially greener materials, appliances, systems, etc., as “significant additions.”

As one of HUD’s primary housing preservation tools since its creation in 1997, OAHP has restructured over 1,600 projects nationwide through M2M. These projects are privately owned, HUD-subsidized (through Section 8), multifamily properties, with approximately 100 units each, on average. In addition to rehabilitation of properties, M2M also resizes and restructures property debt to account for market rent levels, to pay for rehabilitation and 20 years of estimated repairs and replacements, and to establish a financially viable project for the long term.

© 2007 FLORIDA ASSOCIATION OF REALTORS®