Fannie Mae [1] continues its Green Bond Program with the issuance of a cumulative $111 million of Single-Family Green Mortgage-Backed Securities (MBS) since April 2020, when it first introduced this type of transaction to the market. The program is part of "Fannie Mae’s larger effort to tie its business activities to measurable and positive environmental, social, and governance (ESG) outcomes," the GSE said in a press release.
Fannie has issued 15 offerings ranging in size from $1.8 million to $15.4 million in the ten months since the program’s inception. Most recently, in January 2021, Fannie Mae issued three Single-Family Green MBS transactions totaling $17 million, which included loans for properties in Arizona, Maryland, New York, and Texas. The program’s growth is due in part to an increase in the number of participating builder-lenders.
"We are pleased with the growth of our Single-Family Green MBS program and the positive reception from market participants and investors," said Arthur Johnson, VP, Capital Markets, Fannie Mae. "Investors have been drawn to this market because of our commitment to a programmatic issuance of securities pooling mortgages for energy-efficient homes. Also, an increase in the number of lenders participating in this program has helped broaden the geographic diversity of loans pooled in these offerings."
Fannie Mae launched the Green Bond Program on April 22, 2020. It was created in conjunction with the 50th anniversary of Earth Day.
“We are proud to be a driver of innovation in green mortgage finance,” said Hugh R. Frater, CEO, Fannie Mae, when the program began. “Our new Single-Family Green MBS issuances further our commitment to sustainability in our business, the homes we finance, and the communities we serve. These transactions are the latest step in a journey–begun a decade ago when we introduced green finance to the multifamily market–that increasingly ties Fannie Mae’s business activities to measurable Environmental, Social, and Governance outcomes.”
In 2020, the Single-Family Green Bond Framework received a "Light Green" Second Opinion from CICERO Shades of Green, a global provider of green ratings for bonds. The opinion is the result of a research-based evaluation of Fannie Mae’s framework to determine the environmental robustness of the single-family mortgage issuances. Single-Family Green MBS are backed by newly constructed single-family residential homes with ENERGY STAR [2] certifications that meet or exceed the national program requirements for ENERGY STAR 3.0 Certified Homes.
For further details regarding the Single-Family Green MBS program, visit fanniemae.com/GreenMBS [3].