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Fannie Mae Offers Up New Green MBS Issuances

Fannie Mae has announced the continuation of its Green Bond Program with the issuance of two new Single-Family Green mortgage-backed security (MBS) transactions.

The program’s transactions exclusively focus on mortgage loans backed by newly built single-family residential homes with ENERGY STAR certifications that either meet or surpass the national program requirements for ENERGY STAR Certified Homes. The government-sponsored enterprise stated future issuances may include other energy-efficient new construction standards that will meet or exceed those of ENERGY STAR Certified Homes, Version 3.0. Fannie Mae has partnered with the engineering consulting film PEG LLC to ensure all of the properties underlying the MBS received the ENERGY STAR certification.

The latest transactions involve an $11.4 million issuance and a $7.59 million issuance. Both transactions consist of single-family residential mortgages originated by DHI Mortgage and Eagle Home Mortgage on properties constructed by D.R. Horton and Lennar.

Fannie Mae launched the Green Bond Program on April 22, 2020, which was timed to commemorate the 50th anniversary of Earth Day. To date, the program has generated five Single-Family Green MBS transactions totaling approximately $40 million.

“We are proud to be a driver of innovation in green mortgage finance,” said Hugh R. Frater, CEO, Fannie Mae. “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.”

“We are excited about the Single-Family Green MBS program and look forward to increasing our issuances backed by green, energy-efficient mortgage loans,” added Renee Schultz, SVP of Capital Markets. “These offerings have attracted investor interest and serve to enhance liquidity in the single-family mortgage finance market.”

Separately, Fannie Mae has issued $75 billion of Multifamily Green MBS since 2010. These issuances are backed by either green-certified properties or properties targeting a reduction in energy or water consumption.

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.
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